10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-K

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2017

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______

Commission File Number 001-34257

UNITED FIRE GROUP, INC.

(Exact name of registrant as specified in its charter)

Iowa	45-2302834
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)

118 Second Avenue SE

Cedar Rapids, Iowa 52401

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (319) 399-5700

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.001 par value	The NASDAQ Global Select Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or a emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act

Large accelerated filer☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2017 was approximately $1.0 billion. For purposes of this calculation, all directors and executive officers of the registrant are considered affiliates. As of February 26, 2018, 24,912,137 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K incorporates by reference certain information from the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, for its annual shareholder meeting to be held on May 16, 2018.

FORM 10-K TABLE OF CONTENTS

	Page
Forward-Looking Information	1
PART I:
Item 1. Business	3
Item 1A. Risk Factors	12
Item 1B. Unresolved Staff Comments	27
Item 2. Properties	27
Item 3. Legal Proceedings	27
Item 4. Mine Safety Disclosures	27
PART II:
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	28
Item 6. Selected Financial Data	31
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	73
Item 8. Financial Statements and Supplementary Data	74
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	150
Item 9A. Controls and Procedures	150
Item 9B. Other Information	154
PART III:
Item 10. Directors, Executive Officers and Corporate Governance	154
Item 11. Executive Compensation	154
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	154
Item 13. Certain Relationships and Related Transactions, and Director Independence	154
Item 14. Principal Accountant Fees and Services	154
PART IV:
Item 15. Exhibits and Financial Statement Schedules	155
Item 16. Form 10-K Summary	168
Signatures	169
Exhibit 12
Exhibit 21
Exhibit 23.1
Exhibit 23.2
Exhibit 23.3
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

FORWARD-LOOKING INFORMATION

This report may contain forward-looking statements about our operations, anticipated performance and other similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for forward-looking statements. The forward-looking statements are not historical facts and involve risks and uncertainties that could cause actual results to differ from those expected and/or projected. Such forward-looking statements are based on current expectations, estimates, forecasts and projections about United Fire Group, Inc. ("UFG," the "Registrant," the "Company," "we," "us," or "our"), the industry in which we operate, and beliefs and assumptions made by management. Words such as "expect(s)," "anticipate(s)," "intend(s)," "plan(s)," "believe(s)," "continue(s)," "seek(s)," "estimate(s)," "goal(s)," "target(s)," "forecast(s)," "project(s)," "predict(s)," "should," "could," "may," "will continue," "might," "hope," "can" and other words and terms of similar meaning or expression in connection with a discussion of future operations, financial performance or financial condition, are intended to identify forward-looking statements. See Part I, Item 1A "Risk Factors" of this report for more information concerning factors that could cause actual results to differ materially from those in the forward-looking statements.

Risks and uncertainties that may affect the actual financial condition and results of the Company include but are not limited to the following:

• The frequency and severity of claims, including those related to catastrophe losses and the impact those claims have on our loss reserve adequacy; the occurrence of catastrophic events, including international events, significant severe weather conditions, climate change, acts of terrorism, acts of war and pandemics;

• The adequacy of our reserves for property and casualty insurance losses and loss settlement expenses and our life insurance reserve for future policy benefits;

• Geographic concentration risk in both our property and casualty insurance and life insurance businesses;

• The potential disruption of our operations and reputation due to unauthorized data access, cyber-attacks or cyber-terrorism and other security breaches;

• Developments in general economic conditions, domestic and global financial markets, interest rates and other-than-temporary impairment losses that could affect the performance of our investment portfolio;

• Our ability to effectively underwrite and adequately price insured risks;

• Changes in industry trends, an increase in competition and significant industry developments;

• Litigation or regulatory actions that could require us to pay significant damages, fines or penalties or change the way we do business;

• Lowering of one or more of the financial strength ratings of our operating subsidiaries or our issuer credit ratings and the adverse impact such action may have on our premium writings, policy retention, profitability and liquidity;

• Governmental actions, policies and regulations, including, but not limited to, domestic health care reform, financial services regulatory reform, corporate governance, new laws or regulations or court decisions interpreting existing laws and regulations or policy provisions; laws, regulations and stock exchange requirements relating to corporate governance and the cost of compliance;

• Our relationship with and the financial strength of our reinsurers;

• Competitive, legal, regulatory or tax changes that affect the distribution cost or demand for our products through our independent agent/agency distribution network; and

• The satisfaction of the conditions precedent to the consummation of the sale of our life insurance subsidiary, including the receipt of regulatory approvals.

These are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report or as of the date they are

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made. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission ("SEC"), we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

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PART I.

ITEM 1. BUSINESS

GENERAL DESCRIPTION

United Fire Group, Inc. ("UFG", "United Fire", the "Registrant", the "Company", "we", "us", or "our") and its consolidated subsidiaries and affiliates are engaged in the business of writing property and casualty insurance and life insurance and selling annuities through a network of independent agencies. Our insurance company subsidiaries are currently licensed as a property and casualty insurer in 46 states, plus the District of Columbia and as a life insurer in 37 states. United Fire & Casualty Company was incorporated in Iowa in January 1946. Our principal executive office is located at 118 Second Avenue SE, Cedar Rapids, Iowa 52401; telephone: 319-399-5700.

United Fire Group, Inc. owns 100 percent of one subsidiary, United Fire & Casualty Company. United Fire & Casualty Company owns 100 percent of eight subsidiaries: (1) United Life Insurance Company; (2) Addison Insurance Company; (3) Lafayette Insurance Company; (4) United Fire & Indemnity Company; (5) Mercer Insurance Company; (6) Financial Pacific Insurance Company; (7) UFG Specialty Insurance Company; and (8) United Real Estate Holdings Company, LLC. Mercer Insurance Company owns 100 percent of two subsidiaries: (1) Franklin Insurance Company; and (2) Mercer Insurance Company of New Jersey, Inc. United Fire Lloyds is an affiliate of United Fire & Indemnity Company.

In 2015, the Company dissolved three of its holding companies in order to flatten our organizational chart. The companies dissolved were American Indemnity Financial Corporation, Mercer Insurance Group, Inc. and Financial Pacific Insurance Group, Inc. In addition, Texas General Indemnity Company was renamed to UFG Specialty Insurance Company on July 1, 2015.

Reportable Segments and Discontinued Operations

We have historically reported our operations in two business segments: property and casualty insurance and life insurance. On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company, to Kuvare US Holdings, Inc. ("Kuvare"). As a result, our life insurance business, previously a separate segment, has been considered held for sale and reported as discontinued operations in the Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income and Consolidated Statements of Cash Flows (collectively, the "Consolidated Financial Statements"). Subsequent to the announcement of this sale, our continuing operations are now reported as one business segment. All current and prior periods reflected in this Form 10-K have been presented as continuing and discontinued operations, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval. For more information, refer to Note 17 "Discontinued Operations".

Our property and casualty insurance business is comprised of commercial lines insurance, including surety bonds, personal lines insurance and assumed reinsurance. All of our property and casualty insurance subsidiaries and our affiliate belong to an intercompany reinsurance pooling arrangement. On July 1, 2015, UFG Specialty Insurance Company entered the pooling arrangement. Pooling arrangements permit the participating companies to rely on the capacity of the entire pool's capital and surplus, rather than being limited to policy exposures of a size commensurate with each participant's own surplus level. Under such arrangements, the members share substantially all of the insurance business that is written and allocate the combined premiums, losses and expenses based on percentages defined in the arrangement.

Our life insurance business consists solely of the operations of United Life Insurance Company. Our life insurance business is comprised of deferred and immediate fixed annuities, universal life insurance products and traditional life insurance products.

Employees

As of December 31, 2017, we employed 1,164 full-time employees and 16 part-time employees. We are not a party to any collective bargaining agreement.

Available Information

We provide free and timely access to all our reports filed with the SEC in the Investor Relations section of our website at www.ufginsurance.com. Under the "Investors" tab, select "Financial Documents" and then, select "SEC

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Filings" to view the list of our SEC filings, which includes annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, beneficial ownership reports on Forms 3, 4 and 5 and amendments to reports filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Exchange Act. Such reports are made available as soon as reasonably practicable after they are filed with or furnished to the SEC.

Our Code of Ethics and Business Conduct is also available at www.ufginsurance.com in the Investor Relations section. To view it, under the "Investors" tab, select "Governance Documents" and then "Code of Ethics and Business Conduct."

Free paper copies of any materials that we file with or furnish to the SEC can also be obtained by writing to Investor Relations, United Fire Group, Inc., 118 Second Avenue SE, Cedar Rapids, Iowa 52401.

MARKETING AND DISTRIBUTION

We market our products through our home office in Cedar Rapids, Iowa, and five regional offices: (1) Westminster, Colorado, a suburb of Denver; (2) Webster, Texas, a suburb of Houston; (3) Pennington, New Jersey; (4) Phoenix, Arizona; and (5) Rocklin, California. We are represented through approximately 1,200 independent property and casualty agencies and by approximately 1,600 independent life agencies.

Continuing Operations - Property and Casualty Insurance Business

In 2017, 2016 and 2015 the direct statutory premiums written by our property and casualty insurance operations were distributed as follows:

	Years Ended December 31,						% of Total
(In Thousands)	2017		2016		2015		2017		2016		2015
Texas	$	178,314	$	156,926	$	142,485	16.7	%	15.6	%	15.4	%
California	123,285		117,669		109,420		11.6		11.7		11.8
Iowa	100,826		105,948		99,949		9.5		10.5		10.8
Missouri	64,746		58,964		53,867		6.1		5.9		5.8
Colorado	53,981		47,678		45,805		5.1		4.7		4.9
Minnesota	50,432		51,033		44,993		4.7		5.1		4.9
New Jersey	49,305		52,232		50,979		4.6		5.2		5.5
Illinois	41,042		43,666		43,381		3.9		4.3		4.7
Louisiana	39,849		38,219		36,594		3.7		3.8		3.9
All Other States	363,427		333,788		299,027		34.1		33.2		32.3
Direct Statutory Premiums Written	$	1,065,207	$	1,006,123	$	926,500	100.0	%	100.0	%	100.0	%

We staff our regional offices with underwriting, claims and marketing representatives and administrative technicians, all of whom provide support and assistance to the independent agencies. Also, home office staff technicians and specialists provide support to our subsidiaries, regional offices and independent agencies. We use management reports to monitor subsidiary and regional offices for overall results and conformity to our business policies.

Competition

The property and casualty insurance industry is highly competitive. We compete with numerous property and casualty insurance companies in the regional and national market, many of which are substantially larger and have considerably greater financial and other resources. Except for regulatory considerations, there are limited barriers to entry into the insurance industry. Our competitors may be domestic or foreign, as well as licensed or unlicensed. The exact number of competitors within the industry is not known. Insurers compete on the basis of reliability, financial strength and stability, ratings, underwriting consistency, service, business ethics, price, performance, capacity, policy terms and coverage conditions.

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In addition, because our products are marketed exclusively through independent insurance agencies, most of which represent more than one company, we face competition within each agency and competition to retain qualified independent agents. Our competitors include companies that market their products through agents, as well as companies that sell insurance directly to their customers.

Because we rely solely on independent agencies, we offer a competitive commissions program and a rewarding profit-sharing plan as incentives for agents to place high-quality property and casualty insurance business with us. Property and casualty insurance agencies will receive profit-sharing payments of $15.1 million in 2018, based on profitable business produced by the agencies in 2017. In 2017 for 2016 business, agencies received $16.1 million in profit-sharing payments and in 2016 for 2015 business, agencies received $21.2 million in payments.

Our competitive advantages include our commitment to:

• Strong agency relationships —

◦ A stable workforce, with an average duration of employment of approximately 10.1 years, allows our agents to work with the same, highly-experienced personnel each day.

◦ Our organization is relatively flat, allowing our agents to be close to the highest levels of management and ensuring that our agents will receive answers quickly to their questions.

• Exceptional service — our agents and policyholders always have the option to speak with a real person.

• Fair and prompt claims handling — we view claims as an opportunity to prove to our customers that they have chosen the right insurance company.

• Disciplined underwriting — we empower our underwriters with the knowledge and tools needed to make good decisions for the Company.

• Superior loss control services — our loss control representatives make multiple visits to businesses and job sites each year to ensure safety.

• Effective and efficient use of technology — we use technology to provide enhanced service to our agents and policyholders, not to replace our personal relationships, but to reinforce them.

Discontinued Operations - Life Insurance Business

Our life insurance subsidiary markets its products primarily in the Midwest, East Coast and West. In 2017, 2016 and 2015 the direct statutory premiums written by our life insurance operations were distributed as follows:

	Years Ended December 31,						% of Total
(In Thousands)	2017		2016		2015		2017		2016		2015
Iowa	$	40,773	$	41,559	$	47,616	32.5	%	30.1	%	32.6	%
Wisconsin	14,897		12,578		12,513		11.9		9.1		8.6
Minnesota	12,201		14,289		13,269		9.7		10.3		9.1
Illinois	10,872		12,481		16,128		8.7		9.0		11.0
Nebraska	10,197		10,351		9,334		8.1		7.5		6.4
All Other States	36,581		47,014		47,236		29.1		34.0		32.3
Direct Statutory Premiums Written	$	125,521	$	138,272	$	146,096	100.0	%	100.0	%	100.0	%

Competition

We encounter significant competition in all lines of our life and fixed annuity business from other life insurance companies and other providers of financial services. Since our products are marketed exclusively through independent life insurance agencies that typically represent more than one company, we face competition within our agencies. Competitors include companies that market their products through agents, as well as companies that sell directly to their customers. The exact number of competitors within the industry is not known.

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To attract and maintain relationships with our independent life insurance agencies, we offer competitive commission rates and other sales incentives. Our life insurance business achieves a competitive advantage by offering products that are simple and straightforward, by providing outstanding customer service, by being accessible to our agents and customers, and by using technology in a variety of ways to assist our agents and improve the delivery of service to our policyholders.

OPERATING SEGMENTS

We have historically reported our operations in two business segments: property and casualty insurance and life insurance. On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company, to Kuvare. As a result, our life insurance business, previously a separate segment, has been considered held for sale and reported as discontinued operations in the Consolidated Financial Statements. Subsequent to the announcement of this sale, our continuing operations are now reported as one business segment. All current and prior periods reflected in this Form 10-K have been presented as continuing and discontinued operations, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval.

For more information specific to continuing and discontinued operations, including products, pricing and seasonality of premiums written is incorporated by reference from, refer to Note 10 "Segment Information" and Note 17 "Discontinued Operations" contained in Part II, Item 8, "Financial Statements and Supplementary Data.

Additionally, for a detailed discussion of our operating results by continuing operations and discontinued operations, refer to the "Consolidated Results of Operations" section in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

REINSURANCE

Incorporated by reference from Note 4 "Reinsurance" contained in Part II, Item 8, "Financial Statements and Supplementary Data."

RESERVES

Continuing Operations - Property and Casualty Insurance Business

Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance primarily covers liability for damage to property of, or injury to, a person or entity other than the insured. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy.

Liabilities for loss and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends.

The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will take action that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc. ("Regnier"), to render an opinion as to the reasonableness of our statutory reserves annually. The actuarial opinion is filed in those states where we are licensed.

On a quarterly basis, United Fire's internal actuary performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our internal actuary to review, on a quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate.

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We do not discount loss reserves based on the time value of money. 

For a more detailed discussion of our loss reserves, refer to the "Critical Accounting Policies" section in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 5 "Reserves for Losses and Loss Settlement Expenses" contained in Part II, Item 8, "Financial Statements and Supplementary Data."

Discontinued Operations - Life Insurance Business

We calculate the policy reserves reported in our Consolidated Financial Statements in accordance with GAAP. For our fixed annuities and universal life policies, we establish a benefit reserve at the time of policy issuance in an amount equal to the deposits received. Subsequently, we adjust the benefit reserve for any additional deposits, interest credited and partial or complete withdrawals, as well as insurance and other expense charges. We base policy reserves for other life products on the projected contractual benefits and expenses and interest rates appropriate to those products. We base reserves for accident and health products, which are a minor portion of our reserves, on appropriate morbidity tables.

We determine reserves for statutory purposes based upon mortality rates and interest rates specified by Iowa state law. Our life insurance subsidiary's reserves meet or exceed the minimum statutory requirements. Griffith, Ballard & Company, an independent actuary, assists us in developing and analyzing our reserves on both a GAAP and statutory basis.

For further discussion of our life insurance reserves, refer to the "Critical Accounting Policies" section in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

INVESTMENTS

Incorporated by reference from Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the headings "Investments," "Market Risk" and "Critical Accounting Policies"; and Note 1 "Significant Accounting Policies" under the headings "Investments," Note 2 "Summary of Investments," and Note 3 "Fair Value of Financial Instruments," contained in Part II, Item 8, "Financial Statements and Supplementary Data."

REGULATION

The insurance industry is subject to comprehensive and detailed regulation and supervision. Each jurisdiction in which we operate has established supervisory agencies with broad administrative powers. While we are not aware of any currently proposed or recently enacted state or federal regulation that would have a material impact on our operations, we cannot predict the effect that future regulatory changes might have on us.

State Regulation

We are subject to extensive regulation, primarily at the state level. The method, extent and substance of such regulation varies by state, but generally has its source in National Association of Insurance Commissioners ("NAIC") model laws and regulations that establish standards and requirements for conducting the business of insurance and that delegate regulatory authority to a state regulatory agency. Moreover, the NAIC Accreditation Program requires state regulatory agencies to meet baseline standards of solvency regulation, particularly with respect to regulation of multi-state insurers. In general, such regulation is intended for the protection of those who purchase or use our insurance products, and not our shareholders. These rules have a substantial effect on our business and relate to a wide variety of matters including: insurance company licensing and examination; the licensing of insurance agents and adjusters; price setting or premium rates; trade practices; approval of policy forms; claims practices; restrictions on transactions between our subsidiaries and their affiliates, including the payment of dividends; investments; underwriting standards; advertising and marketing practices; capital adequacy; and the collection, remittance and reporting of certain taxes, licenses and fees.

The state laws and regulations that have the most significant effect on our insurance operations and financial reporting are discussed below.

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Insurance Holding Company Regulation

We are regulated as an insurance holding company system in the states of domicile of our property and casualty insurance companies and life insurance subsidiary: Iowa (United Fire & Casualty Company, United Life Insurance Company, UFG Specialty Insurance Company and Addison Insurance Company), California (Financial Pacific Insurance Company), Louisiana (Lafayette Insurance Company), New Jersey (Mercer Insurance Company of New Jersey, Inc.), Pennsylvania (Mercer Insurance Company and Franklin Insurance Company) and Texas (United Fire & Indemnity Company and United Fire Lloyds). These regulations require that we annually furnish financial and other information about the operations of the individual companies within our holding company system. Generally, the insurance laws of these states provide that notice to the state insurance commissioner is required before finalizing any transaction affecting the ownership or control of an insurer and before finalizing certain material transactions between an insurer and any person or entity within its holding company system. In addition, some of those transactions cannot be finalized without the commissioner's prior approval.

Most states have now adopted the version of the Model Insurance Holding Company System Regulation Act and Regulation as amended by the NAIC in December 2010 (the "Amended Model Act") to introduce the concept of "enterprise risk" within an insurance company holding system. Enterprise risk is defined as any activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or the liquidity of the insurer or its insurance holding company system as a whole. The Amended Model Act imposes more extensive informational requirements on us, including requiring us to prepare an annual enterprise risk report that identifies the material risks within our insurance company holding system that could pose enterprise risk to our licensed insurers. Compliance with new reporting requirements under the Amended Model Act began for us in 2014 for the 2013 fiscal year.

Restrictions on Shareholder Dividends

As an insurance holding company with no independent operations or source of revenue, our capacity to pay dividends to our shareholders is based on the ability of our insurance company subsidiaries to pay dividends to us. The ability of our subsidiaries to pay dividends to us is regulated by the laws of their state of domicile. Under these laws, insurance companies must provide advance informational notice to the domicile state insurance regulatory authority prior to payment of any dividend or distribution to its shareholders. Prior approval from the state insurance regulatory authority must be obtained before payment of an "extraordinary dividend" as defined under the state's insurance code. The amount of ordinary dividends that may be paid to us is subject to certain limitations, the amounts of which change each year. In all cases, we may pay dividends only from our earned surplus. Refer to the "Market Information" section of Part II, Item 5, "Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities," and Note 6 "Statutory Reporting, Capital Requirements and Dividends and Retained Earnings Restrictions," contained in Part II, Item 8, "Financial Statements and Supplementary Data" for additional information about the dividends we paid during 2017.

Price Regulation

Nearly all states have insurance laws requiring us to file rate schedules, policy or coverage forms, and other information with the state's regulatory authority. In certain states, rate schedules, policy forms, or both, must be approved prior to use. While insurance laws vary from state to state, their objectives are generally the same: an insurance rate cannot be excessive, inadequate or unfairly discriminatory. The speed with which we can change our rates in response to competition or in response to increasing costs depends, in part, on the willingness of state regulators to allow adequate rates for the business we write.

Investment Regulation

We are subject to various state regulations requiring investment portfolio diversification and limiting the concentration of investments we may maintain in certain asset categories. Failure to comply with these regulations leads to the treatment of nonconforming investments as nonadmitted assets for purposes of measuring statutory surplus. Further, in some instances, state regulations require us to sell certain nonconforming investments.

Exiting Geographic Markets; Canceling and Nonrenewing Policies

Most states regulate our ability to exit a market. For example, states limit, to varying degrees, our ability to cancel and non-renew insurance policies. Some states prohibit us from withdrawing one or more types of insurance

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business from the state, except upon prior regulatory approval. Regulations that limit policy cancellation and non-renewal may restrict our ability to exit unprofitable markets.

Insurance Guaranty Associations

Each state has insurance guaranty association laws. Membership in a state's insurance guaranty association is generally mandatory for insurers wishing to do business in that state. Under these laws, associations may assess their members for certain obligations that insolvent insurance companies have incurred with regard to their policyholders and claimants.

Typically, states assess each solvent association member with an amount related to that member's proportionate share of business written by all association members within the state. Most state guaranty associations allow solvent insurers to recoup the assessments they are charged through future rate increases, surcharges or premium tax credits. However, there is no assurance that we will ultimately recover these assessments. We cannot predict the amount and timing of any future assessments or refunds under these laws.

Shared Market and Joint Underwriting Plans

State insurance regulations often require insurers to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. These are mechanisms that generally provide applicants with various types of basic insurance coverage that may not otherwise be available to them through voluntary markets. Such mechanisms are most commonly instituted for automobile and workers' compensation insurance, but many states also mandate participation in Fair Access to Insurance Requirements ("FAIR") Plans or Windstorm Plans, which provide basic property coverage. Participation is based upon the amount of a company's voluntary market share in a particular state for the classes of insurance involved. Policies written through these mechanisms may require different underwriting standards and may pose greater risk than those written through our voluntary application process.

Statutory Accounting Rules

For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, state laws require us to calculate and report certain data according to statutory accounting rules as defined in the NAIC Accounting Practices and Procedures Manual. While not a substitute for any GAAP measure of performance, statutory data frequently is used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies.

Insurance Reserves

State insurance laws require that insurance companies analyze the adequacy of their reserves annually. Our appointed actuaries must submit an opinion that our statutory reserves are adequate to meet policy claims-paying obligations and related expenses.

Financial Solvency Ratios

The NAIC annually calculates 13 financial ratios to assist state insurance regulators in monitoring the financial condition of insurance companies. A "usual range" of results for each of these ratios is used by insurance regulators as a benchmark. Departure from the usual range on four or more of the ratios could lead to inquiries from individual state insurance departments as to certain aspects of a company's business. In addition to the financial ratios, states also require us to calculate a minimum capital requirement for each of our insurance companies based on individual company insurance risk factors. These "risk-based capital" results are used by state insurance regulators to identify companies that require regulatory attention or the initiation of regulatory action. At December 31, 2017, all of our insurance companies had capital in excess of the required levels.

Federal Regulation

Although the federal government and its regulatory agencies generally do not directly regulate the business of insurance, federal initiatives and legislation often have an impact on our business. These initiatives and legislation include tort reform proposals, proposals addressing natural catastrophe exposures, terrorism risk mechanisms, federal financial services reforms, various tax proposals affecting insurance companies, and possible regulatory limitations, impositions and restrictions arising from the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), and the Patient Protection and Affordable Care Act.

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Various legislative and regulatory efforts to reform the tort liability system have impacted and will continue to impact our industry. Although there has been some tort reform with positive impact to the insurance industry, new causes of action and theories of damages continue to be proposed in state court actions or by federal or state legislatures that continue to expand liability for insurers and their policyholders. For example, some state legislatures have from time-to-time considered legislation addressing direct actions against insurers related to bad faith claims. As a result of this unpredictability in the law, insurance underwriting is expected to continue to be difficult in commercial lines, professional liability and other specialty coverages.

Dodd-Frank expanded the federal presence in insurance oversight and may increase regulatory requirements that are applicable to us. Dodd-Frank's requirements include streamlining the state-based regulation of reinsurance and non-admitted insurance (property or casualty insurance placed with insurers that are eligible to accept insurance, but are not licensed to write insurance in a particular state). Dodd-Frank also established the Federal Insurance Office within the U.S. Department of the Treasury that is authorized to, among other things, gather data and information to monitor aspects of the insurance industry, identify issues in the regulation of insurers about insurance matters, and preempt state insurance measures under certain circumstances.

Dodd-Frank also contains a number of provisions related to corporate governance and disclosure matters. In response to Dodd-Frank, the SEC has adopted or proposed rules regarding director independence, director and officer hedging activities, executive compensation clawback policies, compensation advisor independence, pay versus performance disclosures, internal pay equity disclosures, and shareholder proxy access. We continue to monitor developments under Dodd-Frank and their impact on us, insurers of similar size and the insurance industry as a whole.

The Patient Protection and Affordable Care Act and the related amendments in the Health Care and Education Reconciliation Act may increase our operating costs and underwriting losses. This landmark legislation continues to result in numerous changes within the health care industry that could create additional operating costs for us, particularly with respect to our workers' compensation products.

FINANCIAL STRENGTH AND ISSUER CREDIT RATING

Our financial strength, as measured by statutory accounting principles, is regularly reviewed by an independent rating agency that assigns a rating based upon criteria such as results of operations, capital resources and minimum policyholders' surplus requirements. An insurer's financial strength rating is one of the primary factors evaluated by those in the market to purchase insurance. A poor rating indicates that there is an increased likelihood that the insurer could become insolvent and therefore not able to fulfill its obligations under the insurance policies it issues. This rating can also affect an insurer's level of premium writings, the lines of business it can write and, for insurers like us that are also public registrants, the market value of its securities.

Our property and casualty insurers are rated by A.M. Best Company ("A.M. Best") on a group basis. Our pooled property and casualty insurers have all received an "A" (Excellent) financial strength rating from A.M. Best. Our life insurance subsidiary has received an "A-" (Excellent) financial strength rating from A.M. Best. According to A.M. Best, companies rated "A" and "A-" have "an excellent ability to meet their ongoing obligations to policyholders."

A.M. Best also assigns issuer credit ratings based on a company's ability to repay its debts. All of our property and casualty insurers have received an issuer credit rating of "a" from A.M. Best. Our life insurance subsidiary has received an issuer credit rating of "a-" from A.M. Best. Beginning in 2012, our holding company parent was also rated by A.M. Best, receiving an issuer credit rating of "bbb."

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EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth information concerning the following executive officers:

Name	Age	Position
Randy A. Ramlo	56	President and Chief Executive Officer
Michael T. Wilkins	54	Executive Vice President and Chief Operating Officer
Dawn M. Jaffray	51	Senior Vice President and Chief Financial Officer
Barrie W. Ernst	63	Vice President and Chief Investment Officer
Neal R. Scharmer	61	Vice President, General Counsel and Corporate Secretary
Michael J. Sheeley	57	Vice President and Chief Operating Officer, United Life Insurance Company

A brief description of the business experience of these officers follows:

Randy A. Ramlo became our President and Chief Executive Officer in May 2007. He previously served as our Chief Operating Officer from May 2006 until May 2007, as Executive Vice President from May 2004 until May 2007, and as Vice President, Fidelity and Surety, from November 2001 until May 2004. He also worked as an underwriting manager in our Great Lakes region. Mr. Ramlo began his employment with us as an underwriter in 1984.

Michael T. Wilkins became our Executive Vice President and Chief Operating Officer in May 2014. He served as our Executive Vice President, Corporate Administration, from May 2007 to May 2014. He was our Senior Vice President, Corporate Administration, from May 2004 until May 2007, our Vice President, Corporate Administration, from August 2002 until May 2004 and the resident Vice President in our Lincoln regional office from 1998 until 2002. Prior to 1998, Mr. Wilkins held various other positions within the Company since joining us in 1985.

Dawn M. Jaffray became our Senior Vice President and Chief Financial Officer in May 2015. Ms. Jaffray previously served as Chief Financial Officer of Soleil Advisory Group, a consulting firm specializing in operational consulting, mergers and acquisitions, investment and strategy from 2009 to 2015. Prior to her service with Soleil Advisory Group, Ms. Jaffray held numerous positions in insurance operations and mergers/acquisition activities, primarily in the role of principal financial officer. Ms. Jaffray's business experience has been focused in particular on insurance, finance and capital management.

Barrie W. Ernst is our Vice President and Chief Investment Officer. He joined us in August 2002. Previously, Mr. Ernst served as Senior Vice President of SCI Financial Group in Cedar Rapids, Iowa, where he worked from 1980 to 2002. SCI Financial Group was a regional financial services firm providing brokerage, insurance and related services to its clients.

Neal R. Scharmer was appointed our Vice President and General Counsel in May 2001 and Corporate Secretary in May 2006. He joined us in 1995.

Michael J. Sheeley was appointed Vice President and Chief Operating Officer of United Life Insurance Company in March 2011. Prior to assuming leadership of United Life Insurance Company, Mr. Sheeley served us as personal lines underwriting manager from 1991 to 2011. He has also served in various capacities including commercial underwriting and claims since joining us in 1985.

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ITEM 1A. RISK FACTORS

We provide readers with the following discussion of risks and uncertainties relevant to our business. These are factors that we believe could cause our actual results to differ materially from our historic or anticipated results. We could also be adversely affected by other factors, in addition to those listed here. Additional information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements is set forth in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Risks Relating to Our Business

The occurrence, frequency and severity of catastrophe losses are unpredictable and may adversely affect our results of operations, liquidity and financial condition.

Our property and casualty insurance operations expose us to claims arising from catastrophic events affecting multiple policyholders. Such catastrophic events consist of various natural disasters, including, but not limited to, hurricanes, tornadoes, windstorms, hailstorms, fires and wildfires, earthquakes, severe winter weather, tropical storms, volcanic eruptions and man-made disasters such as terrorist acts (including biological, chemical or radiological events), explosions, infrastructure failures and results from political instability. We have exposure to tropical storms and hurricanes along the Gulf Coast, Eastern and Southeastern coasts of the United States. We have exposure to tornadoes, windstorms and hail storms throughout the United States. We have exposure to earthquakes along the West Coast and the New Madrid Fault area. Our automobile and inland marine business also exposes us to losses arising from floods and other perils.

Property damage resulting from catastrophes is the greatest risk of loss we face in the ordinary course of our business. We have exposure to catastrophe losses under both our commercial insurance policies and our personal insurance policies. The losses from catastrophic events are a function of both the extent of our exposure, the frequency and severity of the events themselves and the level of reinsurance assumed and ceded. For example, the losses experienced from a tornado will vary on whether the location of the tornado was in a highly populated or unpopulated area, the concentration of insureds in that area and the severity of the tornado. Increases in the value and geographic concentration of insured property and the effects of inflation could increase the severity of claims from a catastrophic event.

Long-term weather trends may be changing and new types of catastrophe losses may be developing due to climate change, which is a phenomenon that has been associated with extreme weather events linked to rising temperatures, including effects on global weather patterns, greenhouse gases, sea, land and air temperature, sea levels, rain and snow. While the emerging science regarding climate change and its connection to extreme weather events continues to be debated, in recent years there has been an increase in frequency and severity of tornadoes and hailstorms, and hurricanes are now impacting areas further inland than experienced in the recent past. Such changes in climate conditions could cause our underlying modeling data to be less accurate, limiting our ability to evaluate and manage our risk.

In addition, as with catastrophe losses generally, it can take a long time for us to determine our ultimate losses associated with a particular catastrophic event. The inability to access portions of the impacted area, the complexity of the losses, legal and regulatory uncertainty and the nature of the information available for certain catastrophic events may affect our ability to estimate the claims and claim adjustment expense reserves. Such complex factors include, but are not limited to: determining the cause of the damage, evaluating general liability exposures, estimating additional living expenses, the impact of demand surge, infrastructure disruption, fraud, business interruption costs and reinsurance collectability.

The timing of a catastrophic occurrence at the end or near the end of a reporting period may also affect the information available to us when estimating claims and claim adjustment expense reserves for the reporting period. As our claims experience for a particular catastrophe develops, we may be required to adjust our reserves to reflect our revised estimates of the total cost of claims. However, because the occurrence and severity of catastrophes are inherently unpredictable and may vary significantly from year to year and region to region, historical results of operations may not be indicative of future results of operations.

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Catastrophes may reduce our net income, cause substantial volatility in our financial results for any fiscal quarter or year or otherwise adversely affect our financial condition, liquidity or results of operations. Catastrophes may also negatively affect our ability to write new business.

Following catastrophes there are also sometimes legislative, administrative and judicial decisions that seek to expand insurance coverage for claims beyond the original intent of the policies or seek to prevent the application of deductibles. Our ability to manage catastrophic exposure may be limited by public policy considerations, the political environment, changes in the general economic climate and/or social responsibilities.

Our reserves for property and casualty insurance losses and loss settlement expenses and our life insurance reserves for future policy benefits are based on estimates and may be inadequate, adversely impacting our financial results.

We maintain insurance reserves to cover our estimated ultimate unpaid liability for claim and claim adjustment expenses, including the estimated cost of the claims adjustment process, for reported and unreported claims and for future policy benefits. Our reserves may prove to be inadequate, which may result in future charges to earnings and/or a downgrade of our financial strength rating or the financial strength ratings of our insurance company subsidiaries.

Insurance reserves represent our best estimate at a given point in time. They are not an exact calculation of liability but instead are complex estimates, which are a product of actuarial expertise and projection techniques from a number of assumptions and expectations about future events, many of which are highly uncertain.

The process of estimating claims and claims adjustment expense reserves involves a high degree of judgment. These estimates are based on historical data and the impact of various factors such as:

• actuarial and statistical projections of the cost of settlement and administration of claims reflecting facts and circumstances then known;

• historical claims information and loss emergence patterns;

• assessments of currently available data;

• estimates of future trends in claims severity and frequency;

• judicial theories of liability;

• economic factors such as inflation;

• estimates and assumptions regarding social, judicial and legislative trends, and actions such as class action lawsuits and judicial interpretation of coverages or policy exclusions; and

• the level of insurance fraud.

Many of these factors are not quantifiable. The inherent uncertainties of estimating reserves are greater for certain types of liabilities, particularly those in which the various considerations affecting the type of claim are subject to change and in which long periods of time may elapse before a definitive determination of liability is made. Reserve estimates are continually refined in a regular and ongoing process as experience develops and further claims are reported and settled.

Along with other insurers, we use internal and external models in assessing our exposure to catastrophe losses that assume various conditions and probability scenarios; however, these models do not necessarily accurately predict future losses or accurately measure losses currently incurred. Models for catastrophes use historical information about various catastrophes and details about our in-force business. While we use this information in our pricing and risk managements, there are limitations with respect to their usefulness in predicting losses in any reporting period. Such limitations lead to questionable predictive capability and post-event measurements that have not been well understood or proven to be sufficiently reliable. In addition, the models are not necessarily reflective of our state-specific policy language, demand surge for labor and materials or loss settlement expenses, all of which are subject to wide variation.

For our life insurance business, we calculate life insurance product reserves based on our assumptions, including estimated premiums we will receive over the assumed life of the policy, the timing of the event covered by the

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insurance policy and the amount of benefits or claims to be paid. The premiums that we charge and the liabilities that we hold for future policy benefits are based on assumptions reflecting a number of factors, including the amount of premiums that we will receive in the future, the rate of return on assets we purchase with premiums received, expected claims, mortality, morbidity, expenses and persistency, which is the measurement of the percentage of insurance policies remaining in force from year to year. However, due to the nature of the underlying risks and the high degree of uncertainty associated with the determination of the liabilities for unpaid policy benefits and claims, we cannot determine precisely the amounts we will ultimately pay to settle these liabilities. To the extent that actual experience is less favorable than our underlying assumptions, we could be required to increase our liabilities, which may harm our financial strength and reduce our profitability.

For example, if mortality rates are higher than our pricing assumptions, we will be required to make greater claims payments on our life insurance policies than we had projected. Our results of operations may also be adversely impacted by an increase in morbidity rates.

Actual loss and loss settlement expenses paid might exceed our reserves. If our loss reserves are insufficient, or if we believe our loss reserves are insufficient to cover our actual loss and loss settlement expenses, we will have to increase our loss reserves and incur charges to our earnings, which could indicate that premium levels were insufficient. As such, deviations from one or more of these assumptions could result in a material adverse impact on our Consolidated Financial Statements and our financial strength rating or the financial strength ratings of our insurance company subsidiaries could be downgraded.

For a detailed discussion of our reserving process and the factors we consider in estimating reserves, refer to the "Critical Accounting Policies" section in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Our geographic concentration in both our property and casualty insurance and life insurance businesses ties our performance to the business, economic and regulatory conditions of certain states.

The following states provided 49.0 percent of the direct statutory premiums written for the property and casualty insurance businesses in 2017: Texas (16.7 percent), California (11.6 percent), Iowa (9.5 percent), Missouri (6.1 percent) and Colorado (5.1 percent). The following states provided 70.9 percent of the direct statutory premiums written for the life insurance business in 2017: Iowa (32.5 percent), Wisconsin (11.9 percent), Minnesota (9.7 percent), Illinois (8.7 percent) and Nebraska (8.1 percent).

Our revenues and profitability are subject to the prevailing regulatory, legal, economic, political, demographic, competitive, weather and other conditions in the principal states in which we do business. With respect to regulatory conditions, the NAIC and state legislators continually reexamine existing laws and regulations, specifically focusing on modifications to holding company regulations, interpretations of existing laws and the development of new laws and regulations. In a time of financial uncertainty or a prolonged economic downturn, regulators may choose to adopt more restrictive insurance laws and regulations. Changes in regulatory or any other of these conditions could make it less attractive for us to do business in such states and would have a more pronounced effect on us compared to companies that are more geographically diversified. In addition, our exposure to severe losses from localized natural perils, such as hurricanes or hailstorms, is increased in those areas where we have written a significant amount of property insurance policies.

Unauthorized data access, cyber attacks and other security breaches could have an adverse impact on our business and reputation.

We rely on computer systems to conduct our business for our customer service, marketing and sales activities, customer relationship management and producing financial statements. Our business and operations rely on secure and efficient processing, storage and transmission of customer and Company data, including personally identifiable information. Our ability to effectively operate our business depends upon our ability, and the ability of certain third party vendors and business partners, to access our computer systems to perform necessary business functions, such as providing quotes and product pricing, billing and processing premiums, administering claims, and reporting our financial results.

We retain confidential information on our computer systems, including customer information and proprietary business information belonging to us and our policyholders. Our business and operations depend upon our ability to

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safeguard this personally identifiable information. Our systems may be vulnerable to unauthorized access and hackers, computer viruses, and other scenarios in which our data may be compromised.

Cyber attacks involving these systems, or those of our third party vendors, could be carried out remotely and from multiple sources and could interrupt, damage, or otherwise adversely affect the operations of these critical systems. Cyber attacks could result in the modification or theft of data, the distribution of false information, or the denial of service to users. Threats to data security can emerge from a variety of sources and change rapidly, resulting in the ongoing need to expend resources to secure our data in accordance with customer expectations and statutory and regulatory requirements.

Any compromise of the security of our data could expose us to liability and harm our reputation, which could affect our business and results of operations. We continually enhance our operating procedures and internal controls to effectively support our business and comply with our regulatory and financial reporting requirements, but there can be no assurances that we will be able to implement security measures adequate to prevent every security breach.

Although, to date, we do not believe we have experienced any material cyber attacks, the occurrence, scope and effect of any cyber attack may remain undetected for a period of time. We maintain cyber liability insurance coverage that provides both third-party liability and first-party insurance coverages; however, our insurance may be insufficient to cover all losses and expenses related to a cyber attack.

Conditions in the global capital markets and the economy generally may weaken materially and adversely affect our business and results of operations.

Our results of operations, financial position and liquidity are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. As a result of such conditions, our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether. In addition, we may experience an elevated incidence of claims and lapses or surrenders of policies causing a change in our exposure.

Factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets, investor and consumer confidence and inflation levels all affect the business and economic environment and, ultimately, the amount and profitability of our business. In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower business investment, negative investor sentiment and lower consumer spending, the demand for our insurance products could be adversely affected.

We are subject to certain risks related to our investment portfolio that could negatively affect our profitability.

Investment income is an important component of our net income and overall profitability. We invest premiums received from policyholders and other available cash to generate investment income and capital appreciation, while also maintaining sufficient liquidity to pay covered claims, operating expenses and dividends. As discussed in detail below, general economic conditions, changes in financial markets and many other factors beyond our control can adversely affect the value of our investments and the realization of investment income.

We primarily manage our investment portfolio internally under required statutory guidelines and investment guidelines approved by our Board of Directors and the boards of directors of our subsidiaries. Although these guidelines stress diversification and capital preservation, our investments are subject to a variety of risks, including:

• Credit Risk - The value of our investment in marketable securities is subject to impairment as a result of deterioration in the creditworthiness of the issuer. Such impairments could reduce our net investment income and result in realized investment losses. The vast majority of our investments (98.1% at December 31, 2017) are made in investment-grade securities. Although we try to manage this risk by diversifying our portfolio and emphasizing credit quality, our investments are subject to losses as a result of a general downturn in the economy.

• Interest Rate Risk - A significant portion of our investment portfolio (88.5 percent at December 31, 2017) consists of fixed income securities, primarily corporate and municipal bonds (69.9 percent at December 31, 2017). These securities are sensitive to changes in interest rates. An increase in interest rates typically reduces the fair value of fixed income securities, while a decline in interest rates reduces the investment

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income earned from future investments in fixed income securities. In recent periods, interest rates have been at or near historic lows. It is possible that this trend may continue for a prolonged period of time. We generally hold our fixed income securities to maturity, so our interest rate exposure does not usually result in realized losses. However, rising interest rates could result in a significant reduction of the book value of our fixed maturity investments. Low interest rates, and low investable yields, could adversely impact our net earnings as reinvested funds produce lower investment income.

Fluctuationsin interest rates may cause increased surrenders and withdrawals from our life insurance and annuity products. In periods of rising interest rates, or if long-term interest rates rise dramatically within a very short time period, certain portions of our life insurance and annuities businesses may be exposed to disintermediation risk, which refers to the risk that surrenders and withdrawals of life insurance policies and annuity contracts, along with policy loans, may increase as policyholders seek to buy products with perceived higher rates of return. This may require us to liquidate assets in an unrealized loss position. Due to the long-term nature of the liabilities associated with certain portions of our life insurance business, sustained declines in long-term interest rates may subject us to reinvestment risks and increased hedging costs. In other situations, a sudden change in interest rates may result in an unexpected change in the duration of certain life insurance liabilities, creating asset and liability duration mismatches.

Interest rates are highly sensitive to many factors beyond our control including general economic conditions, changes in governmental regulations and monetary policy, and national and international political conditions.

• Liquidity Risk - We seek to match the maturities of our investment portfolio with the estimated payment date of our loss and loss adjustment expense reserves to ensure strong liquidity and avoid having to liquidate securities to fund claims. Risk such as inadequate loss and loss adjustment reserves or unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. This could result in significant realized losses depending on the conditions of the general market, interest rates and credit profile of individual securities.

Further, our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the portion of the investment portfolio that is carried at fair value as reflected in our financial statements is not reflective of prices at which actual transactions could occur.

• Market Risk - Our investments are subject to risks inherent in the global financial system and capital markets. The value and risks of our investments may be adversely affected if the functioning of those markets is disrupted or otherwise affected by local, national or international events, such as: changes in regulation or tax policy; changes in legislation relating to bankruptcy or other proceedings; infrastructure failures; wars or terrorist attacks; the overall health of global economies; a significant change in inflation expectations; a significant devaluation of government or private sector credit and/or currency values; and other factors or events not specifically attributable to changes in interest rates, credit losses, and liquidity needs.

• Credit Spread Risk - Our exposure to credit spreads primarily relates to market price variability and reinvestment risk associated with changes in credit spreads. Valuations may include assumptions or estimates that may have significant period-to-period changes from market volatility, which could have a material adverse effect on our results of operations or financial condition.

Our fixed maturity investment portfolio is invested substantially in state, municipal and political subdivision bonds. Our fixed maturity investment portfolio could be subject to default or impairment, in particular:

• States and local governments have been operating under deficits or projected deficits which may have an impact on the valuation of our municipal bond portfolio.

• There is a risk of widespread defaults which may increase if some issuers chose to voluntarily default instead of implementing fiscal measures such as increasing tax rates or reducing spending. Such risk may also increase if there are changes in legislation permitting states, municipalities and political subdivisions to

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file for bankruptcy protection where they were not permitted to before. Judicial interpretations in such bankruptcy proceedings may also adversely affect the collectability of principal and interest, and/or valuation of our bonds. Changes in tax laws impacting marginal tax rates, exemptions, deductions, credits and/or the preferred tax treatment of municipal obligations could also adversely affect the market value of municipal obligations. Since a large portion of our investment portfolio (31.9 percent at December 31, 2017) is invested in tax-exempt municipal obligations, any such changes in tax law could adversely affect the value of our investment portfolio.

We exercise prudence and significant judgment in analyzing and validating fair values, which are primarily provided by third parties, for securities in our investment portfolio, including those that are not regularly traded in active markets. We also exercise prudence and significant judgment in determining whether the impairment of particular investments is temporary or other-than-temporary. Due to the inherent uncertainties involved in these judgments, we may incur unrealized losses and subsequently conclude that other-than-temporary write downs of our investments are required.

Our success depends primarily on our ability to underwrite risks effectively and adequately price the risks we underwrite.

The results of our operations and our financial condition depend on our ability to underwrite and set premium rates accurately for a wide variety of determinable and indeterminable risks based on available information. Adequate rates are necessary to generate premiums sufficient to pay losses, loss settlement expenses and underwriting expenses and to earn a profit. To price our products accurately, we must collect and properly analyze a substantial amount of data; develop, test and apply appropriate pricing techniques; closely monitor and timely recognize changes in trends; and project both severity and frequency of losses with reasonable accuracy. We could underprice risks which would adversely affect our profit margins. Conversely, we could overprice risks which could reduce our sales volume and competitiveness. Our ability to undertake these efforts successfully, and to price our products accurately, is subject to a number of risks and uncertainties, including but not limited to:

• the availability of sufficient reliable data and our ability to properly analyze available data;

• market and competitive conditions;

• changes in medical care expenses and restoration costs;

• our selection and application of appropriate pricing techniques; and

• changes in the regulatory market, applicable legal liability standards and in the civil litigation system generally.

The cyclical nature of the property and casualty insurance industry may affect our financial performance.

The property and casualty insurance industry is cyclical in nature and has historically been characterized by soft markets (periods of relatively high levels of price competition, less restrictive underwriting standards and generally low premium rates) followed by hard markets (periods of capital shortages resulting in a lack of insurance availability, relatively low levels of price competition, more selective underwriting of risks and relatively high premium rates). During soft markets, we may lose business to competitors offering competitive insurance at lower prices. We may reduce our premiums or limit premium increases leading to a reduction in our profit margins and revenues. We expect these cycles to continue.

The demand for property and casualty insurance can also vary significantly, rising as the overall level of economic activity increases and falling as that activity decreases. Fluctuations in demand and competition could produce underwriting results that would have a negative impact on the results of our operations and financial condition.

The effects of emerging claim and coverage issues and class action litigation on our business are uncertain.

We are subject to certain effects of emerging or potential claims and coverage issues that arise as industry practices and legal, judicial, social, economic and other environmental conditions change, including unexpected and unintended issues related to claims and coverage. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number and/or size of claims, resulting in further

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increases in our reserves. The effects of these and other unforeseen emerging claim and coverage issues are extremely hard to predict. Examples of these issues include:

• judicial expansion of policy coverage and the impact of new theories of liability;

• an increase of plaintiffs targeting property and casualty insurers, including us, in purported class action litigation regarding claims handling and other practices;

• medical developments that link health issues to particular causes, resulting in liability or workers' compensation (for example, cumulative trauma);

• claims relating to unanticipated consequences of current or new technologies;

• an increase in the variety, number and size of claims relating to liability losses, which often present complex coverage and damage valuation questions;

• claims relating to potentially changing climate conditions, including higher frequency and severity of weather-related events; and

• adverse changes in loss cost trends, including inflationary pressure in medical cost and auto and home repair costs.

A downgrade or a potential downgrade in our financial strength or issuer credit ratings could result in a loss of business and could have a material adverse effect on our financial condition and results of operations.

Ratings are an important factor in establishing the competitive position of insurance companies. Third-party rating agencies assess and rate the claims-paying ability, capital strength and creditworthiness of insurers and reinsurers based on criteria established by the agencies. A.M. Best rates our property and casualty insurance companies on a group basis. Our life insurance subsidiary receives a separate rating. Since 2012, A.M. Best has also given an issuer credit rating to our parent holding company. The table below shows the current ratings assigned to our companies by A.M. Best.

	Financial Strength Rating	Issuer Credit Rating	Rating Held Since
Property and Casualty Insurers	A	a	1994
Life Insurer	A-	a-	1998
United Fire Group, Inc.	N/A	bbb	2012

Financial strength and issuer credit ratings are used by policyholders, insurers, reinsurers and insurance and reinsurance intermediaries as an important means of assessing the financial strength, creditworthiness and quality of insurers and reinsurers. These ratings are not evaluations directed to potential purchasers of our common stock and are not recommendations to buy, sell or hold our common stock. These ratings are subject to change at any time and could be revised downward or revoked at the sole discretion of the rating agency. Downgrades in our financial strength ratings could adversely affect our ability to access the capital markets or could lead to increased borrowing costs in the future. Perceptions of the Company by investors, producers, other businesses and consumers could also be significantly impaired.

We believe that the ratings assigned by A.M. Best are an important factor in marketing our products. Our ability to retain our existing business and to attract new business in our insurance operations depends on our ratings by this agency. Our failure to maintain our ratings, or any other adverse development with respect to our ratings, could cause our current and future independent agents and policyholders to choose to transact their business with more highly rated competitors. If A.M. Best downgrades our ratings or publicly indicates that our ratings are under review, it is likely that we will not be able to compete as effectively with our competitors and our ability to sell insurance policies could decline, leading to a decrease in our premium revenue and earnings. For example, many of our agencies and policyholders have guidelines that require us to have an A.M. Best financial strength rating of "A-" or higher. A reduction of our A.M. Best ratings below "A-" would prevent us from issuing policies to a portion of our current policyholders or other potential policyholders with ratings requirements. Additionally, a ratings downgrade could materially increase the number of surrenders for all or a portion of the net cash values by the owners of

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policies and contracts we have issued, and materially increase the number of withdrawals by policyholders of cash values from their policies.

A reduction in our issuer credit rating could limit our ability to access capital markets or significantly increase the cost to us of raising capital. The failure of our insurance company subsidiaries to maintain their current ratings could dissuade a lender or reinsurance company from conducting business with us. A ratings downgrade could also cause some of our existing liabilities to be subject to acceleration, additional collateral support, changes in terms, or creation of additional financial obligations. It might also increase our interest or reinsurance costs.

We are exposed to credit risk in certain areas of our operations.

In addition to exposure to credit risk related to our investment portfolio, we are exposed to credit risk in several other areas of our business operations, including from:

• our reinsurers, who are obligated to us under our reinsurance agreements. See the risk factor titled "Market conditions may affect our access to and the cost of reinsurance and our reinsurers may not pay losses in a timely manner, or at all," for a discussion of the credit risk associated with our reinsurance program;

• some of our independent agents, who collect premiums from policyholders on our behalf and are required to remit the collected premiums to us;

• some of our policyholders, which may be significant; and

• our surety insurance operations, where we guarantee to a third party that our bonded principal will satisfy certain performance obligations (for example, as in a construction contract) or certain financial obligations. If our policyholder defaults, we may suffer losses and be unable to be reimbursed by our policyholder.

To a large degree, the credit risk we face is a function of the economy; accordingly, we face a greater risk during periods of economic downturn. While we attempt to manage these risks through underwriting and investment guidelines, collateral requirements and other oversight mechanisms, our efforts may not be successful. For example, collateral obtained may subsequently have little or no value. As a result, our exposure to credit risk could materially and adversely affect our results of operation and financial condition.

We are subject to comprehensive laws and regulations, changes to which may have an adverse effect on our financial condition and results of operations.

Insurance is a highly regulated industry. We are subject to extensive supervision and regulation by the states in which we operate. As a public company, we are also subject to increased regulation at the federal level. Our ability to comply with these laws and regulations and obtain necessary and timely regulatory action is, and will continue to be, critical to our success and ability to earn profits.

Examples of regulations that pose particular risks to our ability to earn profits include the following:

• Required licensing. Our insurance company subsidiaries operate under licenses issued by various state insurance departments. If a regulatory authority were to revoke an existing license or deny or delay granting a new license, our ability to continue to sell insurance or to enter or offer new insurance products in that market would be substantially impaired.

• Regulation of insurance rates, fees and approval of policy forms. The insurance laws of most states in which we operate require insurance companies to file insurance premium rate schedules and policy forms for review and approval. When our loss ratio compares favorably to that of the industry, state regulatory authorities may resist or delay our efforts to raise premium rates, even if the property and casualty industry generally is not experiencing regulatory resistance to premium rate increases. If premium rate increases we deem necessary are not approved, we may not be able to respond to market developments and increased costs in that state. State regulatory authorities may even impose premium rate rollbacks or require us to pay premium refunds to policyholders, affecting our profitability. If insurance policy forms we seek to use are not approved by state insurance departments, our ability to offer new products and grow our business in that state could be substantially impaired.

• Restrictions on cancellation, nonrenewal or withdrawal. Many states have laws and regulations restricting an insurance company's ability to cease or significantly reduce its sales of certain types of insurance in that

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state, except pursuant to a plan that is approved by the state insurance departments. These laws and regulations could limit our ability to exit or reduce our business in unprofitable markets or discontinue unprofitable products. For example, the State of Louisiana has a law prohibiting the nonrenewal of homeowners policies written for longer than three years except under certain circumstances, such as for nonpayment of premium or fraud committed by the insured. Additionally, our ability to adjust terms or increase pricing requires approval of regulatory authorities in certain states.

• Risk-based capital and capital adequacy requirements. Our insurance company subsidiaries and affiliate are subject to risk-based capital requirements that require us to report our results of risk-based capital calculations to state insurance departments and the NAIC. These standards apply specified risk factors to various asset, premium and reserve components of statutory capital and surplus reported in our statutory basis of accounting financial statements. Any failure to meet applicable risk-based capital requirements or minimum statutory capital requirements could subject us or our subsidiaries and affiliate to further examination or corrective action by state regulators, including limitations on our writing of additional business, state supervision or liquidation.

• Transactions between insurance companies and their affiliates. Transactions between us, our insurance company subsidiaries and our affiliates generally must be disclosed to, and in some cases approved by, state insurance departments. State insurance departments may refuse to approve or delay their approval of a transaction, which may impact our ability to innovate or operate efficiently.

• Required participation in guaranty funds and assigned risk pools. Certain states have enacted laws that require a property and casualty insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities, and joint underwriting associations where participating insurers are required to provide coverage for assigned risks. The number of risks assigned to us by these plans is based on our share of total premiums written in the voluntary insurance market for that state. Pricing is controlled by the plan, often restricting our ability to charge the premium rate we might otherwise charge. Wherever possible, we utilize a designated servicing carrier to fulfill our obligations under these plans. Designated servicing carriers charge us fees to issue policies, adjust and settle claims and handle administrative reporting on our behalf. In these markets, we may be compelled to underwrite significant amounts of business at lower than desired premium rates, possibly leading to an unacceptable return on equity. While these facilities are generally designed so that the ultimate cost is borne by policyholders, the exposure to assessments and our ability to recoup these assessments through adequate premium rate increases may not offset each other in our financial statements. Moreover, even if they do offset each other, they may not offset each other in our financial statements for the same fiscal period, due to the ultimate timing of the assessments and recoupments or premium rate increases. Additionally, certain states require insurers to participate in guaranty funds to bear a portion of the unfunded obligations of impaired or insolvent insurance companies. These state funds periodically assess losses against all insurance companies doing business in the state. Our operating results and financial condition could be adversely affected by any of these factors.

• Restrictions on the amount, type, nature, quality and concentration of investments. The various states in which we are domiciled have certain restrictions on the amount, type, nature, quality and concentration of our investments. Generally speaking, these regulations require us to be conservative in the nature and quality of our investments and restrict our ability to invest in riskier, but often higher yield investments. These restrictions may make it more difficult for us to obtain our desired investment results.

• State and federal tax laws. Current federal income tax laws generally permit the tax-deferred accumulation of earnings on the premiums paid by the holders of annuities and life insurance products. Taxes, if any, are payable on income attributable to a distribution under the contract for the year in which the distribution is made. The U.S. Congress has, from time to time, considered legislation that would reduce or eliminate the benefit of such deferral of taxation on the accretion of value within life insurance and nonqualified annuity contracts. Enactment of this legislation, including a simplified "flat tax" income structure with an exemption from taxation for investment income, could result in fewer sales of our insurance, annuity and investment products.

The Tax Cuts and Jobs Act enacted on December 22, 2017 (the "Tax Act") may negatively impact parts of our business. In addition, we benefit from certain tax items, including but not limited to, tax-exempt bond

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interest, dividends-received deductions, tax credits (such as foreign tax credits) and insurance reserve deductions. From time to time, the U.S. Congress, as well as foreign, state and local governments, considers legislation that could reduce or eliminate the benefits associated with these tax items. Recent federal tax reform may negatively impact our ability to take deductions that we made in the past. We continue to evaluate the impact of recent tax reform. Also, recent changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning.

• Terrorism Risk Insurance. The Terrorism Risk Insurance Program Reauthorization Act of 2007 was signed into law on December 27, 2007. In January 2015, The Terrorism Risk Insurance Program Reauthorization Act of 2015 ("TRIPRA") was signed into law. TRIPRA extends the Terrorism Risk Insurance Program until December 31, 2020; gradually increases the coverage trigger for shared terrorism losses between the federal government and the insurance industry to $200 billion per year (up from $100 billion); and gradually increases the industry-wide retention to $37.5 billion per year (up from $27.5 billion). For further information about TRIPRA and its effect on our operations, refer to the information in the "Consolidated Results of Operations" section in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations.

• Accounting standards. We prepare our consolidated financial statements in conformity with GAAP, which is periodically revised and/or expanded by recognized authoritative bodies, including the Financial Accounting Standards Board ("FASB"). These principles are subject to interpretation by the SEC and various other bodies formed to interpret and create appropriate accounting principles and guidance. Changes in GAAP and financial reporting requirements, or the interpretation of GAAP or those requirements, may have an impact on the content and presentation of our financial results and could have adverse consequences on our financial results, including lower reported results of operations and shareholders' equity and increased volatility and decreased comparability of our reported results with our historic results and with the results of other insurers. In addition, the required adoption of new accounting standards may result in significant incremental costs associated with initial implementation of and ongoing compliance with those standards. Additional information regarding recently proposed and adopted accounting standards and their potential impact on us is set forth in Note 1 “Summary of Significant Accounting Policies” to Part II, Item 8, “Financial Statements and Supplementary Data.”

• Corporate Governance and Public Disclosure Regulation. Changing laws, regulations and standards relating to corporate governance and public disclosure, including Dodd-Frank, the Sarbanes-Oxley Act of 2002 and related SEC regulations, as well as the listing standards of the NASDAQ Stock Market, have created and are continuing to create uncertainty for public companies. While the federal government has not historically regulated the insurance business, in 2010 Dodd-Frank established a Federal Insurance Office within the U.S. Department of the Treasury. The Federal Insurance Office has limited regulatory authority and is empowered to gather data and information regarding the insurance industry and insurers, monitor aspects of the insurance industry, identify issues with regulation of insurers that could contribute to a systemic crisis in the insurance industry or the overall financial system, coordinate federal policy on international insurance matters and preempt state insurance measures under certain circumstances. While certain details and much of the impact of Dodd-Frank will not be known for some time, Dodd-Frank and other federal regulation adopted in the future may impose burdens on us, including impacting the ways we conduct our business, increasing compliance costs and duplicating state regulation. Additional regulation under these laws in the area of compensation disclosure, particularly regarding internal pay equity, officer and director hedging activities and compensation clawback policies is still expected.

• U.S. Social Security Administration's Death Master File. We have received regulatory inquiries from certain state insurance regulators relating to compliance with unclaimed property laws and the use of data available on the U.S. Social Security Administration's Death Master File (or a similar database) to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. It is possible that other jurisdictions may pursue similar inquiries and that such inquiries may result in payments to beneficiaries, escheatment of funds deemed abandoned under state laws and changes to procedures for the identification and escheatment of abandoned property.

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Compliance with these laws and regulations requires us to incur administrative costs that decrease our profits. These laws and regulations may also prevent or limit our ability to underwrite and price risks accurately, obtain timely premium rate increases necessary to cover increased costs, discontinue unprofitable relationships or exit unprofitable markets and otherwise continue to operate our business profitably. In addition, our failure to comply with these laws and regulations could result in actions by state or federal regulators, including the imposition of fines and penalties or, in an extreme case, revocation of our ability to do business in one or more states. Finally, we could face individual, group and class action lawsuits by our policyholders and others for alleged violations of certain state laws and regulations. Each of these regulatory risks could have a negative effect on our profitability.

Market conditions may affect our access to and the cost of reinsurance and our reinsurers may not pay losses in a timely manner, or at all.

As part of our overall risk and capacity management strategy, we purchase reinsurance for significant amounts of the risk that we and our insurance company subsidiaries and affiliates underwrite, by transferring (or ceding) part of the risk we have assumed to a reinsurance company in exchange for part of the premium we receive in connection with the risk. These reinsurance arrangements diversify our business and reduce our exposure to large losses or from hazards of an unusual nature. As of December 31, 2017, we ceded premiums written of $61.3 million to our reinsurers.

Although reinsurance makes the reinsurer liable to us to the extent the risk is transferred, it does not eliminate our liability to our policyholders because we remain liable as the direct insurer on all of the reinsured risks. As a result we are subject to credit risk relating to our ability to recover amounts due from our reinsurers.

Our ability to collect reinsurance recoverables may be subject to uncertainty. Our losses must meet the qualifying conditions of the reinsurance agreement. Our reinsurance agreements are subject to specified limits and we would not have reinsurance coverage to the extent that it exceeds those limits. We are also subject to the risk that reinsurers may dispute their obligations to pay our claims. Reinsurers must have the financial capacity and willingness to make payments under the terms of a reinsurance agreement or program. Reinsurers may dispute amounts we believe are due to us. Particularly, following a major catastrophic event, our inability to collect a material recovery from a reinsurer on a timely basis, or at all, could have a material adverse effect on our liquidity, operating results and financial condition.

Market conditions determine the availability and cost of the reinsurance protection we purchase, which affects the level of our business profitability, as well as the level and types of risk we retain. Although we purposely work with several reinsurance intermediaries and reinsurers, we may be unable to maintain our current reinsurance facilities or obtain other reinsurance facilities in adequate amounts and at favorable premium rates. Moreover, there may be a situation in which we have more than two catastrophic events within one policy year. Because our current catastrophe reinsurance program only allows for one automatic reinstatement at an additional reinstatement premium, we would be required to obtain a new catastrophe reinsurance policy to maintain our current level of catastrophe reinsurance coverage. Such coverage may be difficult to obtain, particularly if it is necessary to do so during hurricane season following the second catastrophe. If we are unable to renew our expiring facilities or to obtain new reinsurance facilities, either our net exposure to risk will increase or, if we are unwilling to bear an increase in net risk exposures, we will have to reduce the amount of risk we underwrite.

We face significant competitive pressures in our business that could cause demand for our products to fall or hinder our ability to introduce new products or services and keep pace with advances in technology, reducing our revenue and profitability.

The insurance industry is highly competitive and will likely remain that way for the foreseeable future. In our property and casualty insurance business and in our life insurance business we compete, and will continue to compete, with many major U.S. and non-U.S. insurers and smaller regional companies, as well as mutual companies, specialty insurance companies, underwriting agencies, and diversified financial services companies, including banks, mutual funds, broker-dealers and asset-managers. Except for regulatory considerations, there are few barriers to entry in the insurance market. National banks, with their large existing customer bases, may increasingly compete with insurers as a result of court rulings allowing national banks to sell annuity products in some circumstances, and as a result of new legislation removing restrictions on bank affiliations with insurers. These

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developments may increase competition, by increasing the number, size and financial strength of competitors who may be able to offer, due to economies of scale, more competitive pricing than we can.

Our competitors may attempt to increase their market share by lowering rates. In that case, we could experience reductions in our underwriting margins or sales of insurance policies. Losing business to competitors offering similar products at lower prices or who have a competitive advantage may adversely affect the results of our operations. Additionally, economic conditions may reduce the total volume of business available to us and our competitors.

We price our insurance products based on estimated profit margins, and we may not be able to react in a timely manner to reprice our insurance products to respond to changes in the market. Some of our competitors may be larger and have far greater financial, technology and marketing resources than we do. If new or existing competitors decide to target our policyholder base by offering similar or enhanced product offerings or technologies at lower prices than we are able to offer, our premium revenue and our profitability could decline.

Our products are marketed exclusively through independent insurance agencies, most of which represent more than one company. We face competition within each agency and competition to retain qualified independent agents. Our competitors include companies that market their products through agents, as well as companies that sell insurance directly to their customers. In personal insurance, the use of comparative rating technologies has impacted our business and may continue to impact the entire industry. This has resulted in an increase in the total level of quote activity but a lower percentage of quotes have resulted in new business from customers. There is also the potential for similar technology to be used to compare rates for small business.

The successful implementation of our business model depends on our ability to adapt to evolving technologies and industry standards and introduce new products and services. There is no guarantee we will be able to introduce new or improved products, or that our products will achieve market acceptance. We may also not be successful in using new technologies effectively or adapting our proprietary technology to evolving customer requirements, causing our products or services to become obsolete.

Technology may be increasingly playing a role in our ability to be competitive. Innovations such as telematics and other usage-based methods of determining premiums may impact product design and pricing and may be an increasingly important factor in our ability to be competitive. Our competitive position may also be impacted by our ability to institute technology that collects and analyzes a wide variety of data points to make underwriting or other decisions.

Our business depends on the uninterrupted operations of our facilities, systems and business functions.

Our business depends on our employees' or vendors' ability to perform necessary business functions, such as processing new and renewal policies, providing customer service, making claims payments, facilitating collections and cancellations and performing actuarial functions necessary for pricing and product development. We increasingly rely on technology and systems to accomplish these business functions in an efficient and uninterrupted fashion. Our inability to access our facilities or a failure of technology, telecommunications or other systems could significantly impair our ability to perform such functions on a timely basis or affect the accuracy of transactions. If sustained or repeated, such a business interruption or system failure could result in a deterioration of our ability to write and process new and renewal business, serve our agents and policyholders or perform other necessary business functions as discussed above.

If a natural disaster or a terrorist act occurs, our company and employees could be directly adversely affected, depending on the nature of the event. We have an emergency preparedness plan that consists of the information and procedures required to enable rapid recovery from an occurrence, such as natural disaster or business disruption, which could potentially disable us for an extended period of time. This plan was successfully tested during 2008 and 2016, both by the Midwest flooding that affected our corporate headquarters in Cedar Rapids, Iowa, and by Hurricane Ike in 2008 and Hurricane Harvey in 2017 that affected our Gulf Coast regional office in Galveston, Texas. It was also tested, to a lesser extent, by Super Storm Sandy in 2012 that affected our East Coast regional office in Pennington, New Jersey.

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Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs, as well as our access to and the cost of capital.

Although capital market conditions have improved, our results of operations, financial condition, cash flows and statutory capital position could be materially adversely affected by continued volatility, uncertainty and disruptions in the capital and credit markets.

We maintain a level of cash and securities which, combined with expected cash inflows from investments and operations, is believed adequate to meet anticipated short-term and long-term benefit and expense payment obligations. However, withdrawal and surrender levels may differ from anticipated levels for a variety of reasons, such as changes in economic conditions or changes in our claims paying ability and financial strength ratings. In the event our current internal sources of liquidity do not satisfy our needs, we have entered into a $50 million revolving unsecured credit facility that we can access, which also allows the Company to increase the aggregate amount of the commitments thereunder by up to $100 million. The availability of additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the volume of trading activities, the overall availability of credit to the financial services industry, our credit ratings and credit capacity as well as customers' or lenders' perception of our long- or short-term financial prospects. Similarly, our access to funds may be impaired if regulatory authorities or rating agencies take negative actions against us.

Disruptions, uncertainty or volatility in the capital and credit markets may limit our access to capital required to operate our business. Such market conditions may limit our ability to replace, in a timely manner, maturing liabilities; satisfy statutory capital requirements; and access the capital necessary to grow our business. As such, we may be forced to delay raising capital, issue shorter term securities than we prefer, utilize available internal resources or bear an unattractive cost of capital, which could decrease our profitability and significantly reduce our financial flexibility and liquidity.

We may experience difficulty in integrating future acquisitions to our operations.

The successful integration of any newly acquired businesses into our operations will require, among other things:

• the timely receipt of any required regulatory approvals;

• the retention and assimilation of their key management, sales and other personnel;

• the coordination of their lines of insurance products and services;

• the adaptation of their technology, information systems and other processes; and

• the retention and transition of their customers.

Unexpected difficulties in integrating any acquisition could result in increased expenses and the diversion of management time and resources. If we do not successfully integrate any acquired business into our operations, we may not realize the anticipated benefits of the acquisition, which could have a material adverse impact on our financial condition and results of operations. Further, any potential acquisitions may require significant capital outlays and, if we issue equity or convertible debt securities to pay for an acquisition, the issuance may be dilutive to our existing shareholders.

The exclusions and limitations in our policies may not be enforceable.

Many of the policies we issue include exclusions and other conditions that define and limit coverage, which exclusions and conditions are designed to manage our exposure to certain types of risks and expanding theories of legal liability. In addition, many of our policies limit the period during which a policyholder may bring a claim under the policy, which period in many cases is shorter than the statutory period under which these claims can be brought by our policyholders. While these exclusions and limitations help us assess and control our loss exposure, it is possible that a court or regulatory authority could nullify or void an exclusion or limitation, or legislation could be enacted which modifies or bars the use of these exclusions and limitations. This could result in higher than anticipated losses by extending coverage beyond the intent of our underwriting. In some instances, these changes may not become apparent until sometime after we have issued the insurance policies that are affected by these changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a policy is issued.

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Our internal controls are not fail-safe.

As a result of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control objectives have been or will be met, and that every instance of error or fraud has been or will be detected. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake.

The determination of the amount of impairments taken on our investments requires estimates and assumptions which are subject to differing interpretations and could materially impact our results of operations or financial position.

The determination of the amount of impairments varies by investment type and is based upon our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. There can be no assurance that our management has accurately assessed the level of impairments taken in our financial statements. Furthermore, additional impairments may need to be taken in the future. Historical trends may not be indicative of future impairments.

Additionally, our management considers a wide range of factors about the instrument issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the instrument and in assessing the prospects for recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential.

Risks Relating to Our Common Stock

The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations.

As a holding company, we have no significant independent operations of our own. Our principal sources of funds are dividends and other payments received from our subsidiaries. We rely on those dividends for our liquidity and to meet our obligations to pay dividends to shareholders and make share repurchases. Dividends from those subsidiaries depend on their statutory surplus, earnings and regulatory restrictions.

State insurance laws limit the ability of insurance subsidiaries to pay dividends and require our insurance subsidiaries to maintain specified minimum levels of statutory capital and surplus. The actual ability to pay dividends may further be constrained by business and regulatory considerations, such as the impact of dividends on surplus, by our competitive position and by the amount of premiums that we can write. Ordinary dividend payments, or dividends that do not require prior approval by the insurance subsidiaries' domiciliary state insurance regulator are generally limited to amounts determined by a formula which varies by jurisdiction. Extraordinary dividends, on the other hand, require prior regulatory approval by the insurance subsidiaries' domiciliary state insurance regulator before they can be made.

In addition, competitive pressures generally require insurance companies to maintain insurance financial strength ratings. These restrictions and other regulatory requirements affect the ability of our insurance subsidiaries to make dividend payments to us. At times we may not be able to pay dividends on our common stock, or we may be required to seek prior approval from the applicable regulatory authority before we can pay any such dividends. In addition, the payment of dividends by us is within the discretion of our Board of Directors and will depend on numerous factors, including our financial condition, our capital requirements and other factors that our Board of Directors considers relevant.

The price of our common stock may be volatile.

The trading price of our common stock may fluctuate substantially due to a variety of factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could be significant and could cause a loss in the amount invested in our shares of common stock. Factors that could cause fluctuations include, but are not limited to, the following:

• variations in our actual or anticipated operating results or changes in the expectations of financial market analysts with respect to our results;

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• investor perceptions of the insurance industry in general and the Company in particular;

• market conditions in the insurance industry and any significant volatility in the market;

• major catastrophic events; and

• departure of key personnel.

Certain provisions of our organizational documents, as well as applicable insurance laws, could impede an attempt to replace or remove our management or members of our Board of Directors, prevent the sale of the Company or prevent or frustrate any attempt by shareholders to change the direction of the Company, each of which could diminish the value of our common stock.

Our articles of incorporation and bylaws, as well as applicable laws governing corporations and insurance companies, contain provisions that could impede an attempt to replace or remove our management or prevent the sale of the Company that, in either case, shareholders might consider being in their best interests. For example:

• our Board of Directors is divided into three classes. At any annual meeting of our shareholders, our shareholders have the right to appoint approximately one-third of the directors on our Board of Directors. Consequently, it will take at least two annual shareholder meetings to effect a change in control of our Board of Directors;

• our articles of incorporation limit the rights of shareholders to call special shareholder meetings;

• our articles of incorporation set the minimum number of directors constituting the entire Board of Directors at nine and the maximum at 15, and they require approval of holders of 60.0 percent of all outstanding shares to amend these provisions. Within the range, the Board of Directors may increase by one each year the number of directors serving on the Board of Directors;

• our articles of incorporation require the affirmative vote of 60.0 percent of all outstanding shares to approve any plan of merger, consolidation, or sale or exchange of all, or substantially all, of our assets;

• our Board of Directors may fill vacancies on the Board of Directors;

• our Board of Directors has the authority, without further approval of our shareholders, to issue shares of preferred stock having such rights, preferences and privileges as the Board of Directors may determine;

• Section 490.1110 of the Iowa Business Corporation Act imposes restrictions on mergers and other business combinations between us and any holder of 10.0 percent or more of our common stock; and

• Section 490.624A of the Iowa Business Corporation Act authorizes the terms and conditions of stock rights or options issued by us to include restrictions or conditions that preclude or limit the exercise, transfer, or receipt of such rights or options by a person, or group of persons, owning or offering to acquire a specified number or percentage of the outstanding common shares or other securities of the corporation.

Further, the insurance laws of Iowa and the states in which our insurance company subsidiaries are domiciled prohibit any person from acquiring direct or indirect control of us or our insurance company subsidiaries, generally defined as owning or having the power to vote 10.0 percent or more of our outstanding voting stock, without the prior written approval of state regulators.

These provisions of our articles of incorporation and bylaws, and these state laws governing corporations and insurance companies, may discourage potential acquisition proposals. These provisions and state laws may also delay, deter or prevent a change of control of the Company, in particular through unsolicited transactions that some or all of our shareholders might consider to be desirable. As a result, efforts by our shareholders to change the direction or the Company's management may be unsuccessful, and the existence of such provisions may adversely affect market prices for our common stock if they are viewed as discouraging takeover attempts.

If the satisfaction of the conditions precedent to the consummation of the sale of our life insurance subsidiary are not met, including the receipt of regulatory approvals, it may diminish the value of our common stock

On September 18, 2017, we signed a definitive agreement to sell our subsidiary, United Life Insurance Company, to Kuvare. This agreement contains several conditions precedent that must be satisfied prior to closing, including

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planning for the separation and migration of information technology systems and business operations. Further, the Iowa Insurance Division must approve Kuvare's acquisition of United Life Insurance Company. Failure to complete the transaction could adversely affect market prices for our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our headquarters are located in Cedar Rapids, Iowa, where we own approximately 182,000 square feet of office and building space that is ready to occupy. We are in the process of constructing improvements to our Cedar Rapids facilities. In addition, we own and lease office and building space, including underwriting and claims offices, throughout the U.S. We believe our existing facilities, both owned and leased, are in good condition and suitable for the conduct of our business.

ITEM 3. LEGAL PROCEEDINGS

In the normal course of its business, the Company is a party to a variety of legal proceedings. While the final outcome of these legal proceedings cannot be predicted with certainty, management believes all of the proceedings pending as of December 31, 2017 to be ordinary and routine and does not expect these legal proceedings to have a material adverse effect on the Company's financial position or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Shareholders

United Fire Group, Inc.'s common stock is traded on the NASDAQ stock market under the symbol "UFCS." On February 26, 2018, there were 814 holders of record of United Fire Group, Inc. common stock. The number of record holders does not reflect shareholders who beneficially own common stock in nominee or street name, but does include participants in our employee stock purchase plan.

Dividends

Our practice has been to pay quarterly cash dividends, which we have paid every quarter since March 1968.

As a holding company with no independent operations of its own, United Fire Group, Inc. relies on dividends received from its insurance company subsidiaries in order to pay dividends to its common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31, or net income of the preceding calendar year on a statutory basis, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at December 31, 2017, our insurance company subsidiary, United Fire & Casualty, is able to make a maximum of $35.7 million in dividend payments without prior regulatory approval.

The table in the following section shows the quarterly cash dividends declared in 2017 and 2016. Payments of any future dividends and the amounts of such dividends, however, will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors out of legally available funds and there can be no assurance that we will continue to pay such dividends or the amount of such dividends.

Additional information about these restrictions is incorporated by reference from Note 6 "Statutory Reporting, Capital Requirements and Dividends and Retained Earnings Restrictions" contained in Part II, Item 8, "Financial Statements and Supplementary Data."

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Market Information

The following table sets forth the high and low trading price as reported on the NASDAQ stock market for our common stock for the calendar periods indicated, as well as the amount of cash dividends declared on our common stock.

	Share Price				Cash Dividends Declared per share
	High		Low
2017
Quarter Ended:
March 31	$	49.93	$	40.19	$	0.25
June 30	45.80		41.38		0.28
September 30	46.83		38.98		0.28
December 31	49.74		44.10		0.28
Year-end closing share price: $45.58
2016
Quarter Ended:
March 31	$	44.43	$	35.16	$	0.22
June 30	45.75		39.12		0.25
September 30	44.00		40.37		0.25
December 31	50.75		37.54		0.25
Year-end closing share price: $49.17

Issuer Purchases of Equity Securities

Under our share repurchase program, we may purchase our common stock from time to time on the open market or through privately negotiated transactions. The amount and timing of any purchases will be at our discretion and will depend upon a number of factors, including the share price, general economic and market conditions, and corporate and regulatory requirements. Our share repurchase program may be modified or discontinued at any time.

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The following table provides information with respect to purchases of shares of common stock made by or on our behalf or by any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act, during the year ended December 31, 2017:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as a Part of Publicly Announced Plans or Programs	Maximum Number of Shares that may yet be Purchased Under the Plans or Programs
1/1/17 - 1/31/17	—	$	—	—	2,938,471
2/1/17 - 2/28/17	12,000	41.85		12,000	2,926,471
3/1/17 - 3/31/17	122,981	42.66		122,981	2,803,490
4/1/17 - 4/30/17	140,821	42.50		140,821	2,662,669
5/1/17 - 5/31/17	200,624	42.78		200,624	2,462,045
6/1/17 - 6/30/17	20,182	42.94		20,182	2,441,863
7/1/17 - 7/31/17	4,904	43.00		4,904	2,436,959
8/1/17 - 8/31/17	127,387	42.41		127,387	2,309,572
9/1/17 - 9/30/17	73,000	40.92		73,000	2,236,572
10/1/17 - 10/31/17	—	—		—	2,236,572
11/1/17 - 11/30/17	—	—		—	2,236,572
12/1/17 - 12/31/17	—	—		—	2,236,572
Total	701,899			701,899

(1) Our share repurchase program was originally announced in August 2007. In August 2016, our Board of Directors authorized the repurchase of up to an additional 1,500,000 shares of common stock through the end of August 2018. This is in addition to the 1,528,886 shares of common stock remaining under its previous authorizations. As of December 31, 2017 we remained authorized to repurchase 2,236,572 shares of common stock.

United Fire Group, Inc. Common Stock Performance Graph

The following graph compares the performance of an investment in United Fire Group Inc.'s common stock from December 31, 2012 through December 31, 2017, with the Standard & Poor's 500 Index ("S&P 500 Index"), and the Standard & Poor's 600 Property and Casualty Index ("S&P 600 P&C Index"). The graph assumes $100 was invested on December 31, 2012 in our common stock and each of the below listed indices and that all dividends were reinvested on the date of payment without payment of any commissions. Dollar amounts in the graph are rounded to the nearest whole dollar. The performance shown in the graph represents past performance and should not be considered an indication of future performance.

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The following table shows the data used in the total return performance graph above.

	Period Ended
Index	12/31/12		12/31/13		12/31/14		12/31/15		12/31/16		12/31/17
United Fire Group, Inc.	$	100.00	$	134.52	$	143.38	$	189.66	$	248.99	$	236.64
S&P 500 Index	100.00		132.39		150.51		152.59		170.84		208.14
S&P 600 P&C Index	100.00		127.45		134.01		153.98		192.74		210.30

The foregoing performance graph is being furnised as part of this Annual Report on Form 10-K solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish our shareholders with such information, and therefore, shall not be deemed to be filed or incorporated by reference into any filings by the Company under the Securities Act or Exchange Act.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain selected financial data derived from the Consolidated Financial Statements of United Fire Group, Inc. and its subsidiaries and affiliates. The data should be read in conjunction with Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part II, Item 8, "Financial Statements and Supplementary Data."

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(In Thousands, Except Per Share Data)
As of and for the years Ended December 31	2017			2016			2015			2014			2013
Balance Sheet Data:
Total cash and investments - continuing operations	$	1,984,495		$	1,860,978		$	1,737,161		$	1,621,356		$	1,521,534
Total assets
Continuing operations	2,597,297			2,449,140			2,280,674			2,127,623			1,995,069
Assets held for sale	1,586,134			1,605,618			1,609,702			1,729,066			1,725,603
Total assets	4,183,431			4,054,758			3,890,376			3,856,689			3,720,672
Losses and loss settlement expenses	1,224,183			1,123,896			1,003,895			969,437			960,651
Unearned premiums - continuing operations	465,391			443,802			414,971			378,635			340,387
Total liabilities
Continuing operations	1,862,923			1,722,651			1,606,869			1,540,416			1,435,222
Liabilities held for sale	1,347,135			1,390,223			1,404,610			1,498,858			1,502,617
Total liabilities	3,210,058			3,112,874			3,011,479			3,039,274			2,937,839
Net unrealized investment gains, after tax	214,865			133,892			128,369			149,623			116,601
Repurchase of United Fire Group, Inc. common stock	(29,784		)	(3,746		)	(2,423		)	(12,942		)	(1,644		)
Total stockholders' equity	973,373			941,884			878,897			817,415			782,833
Book value per share	39.06			37.04			34.94			32.67			30.87
Income Statement Data from Continuing Operations:
Revenues
Net premiums earned	$	997,492		$	936,131		$	851,695		$	766,939		$	694,192
Investment income, net of investment expenses	51,190			55,284			46,559			44,236			46,332
Net realized investment gains	4,055			4,947			1,124			4,177			6,261
Other income (loss)	—			—			(107		)	911			88
Revenues	1,052,737			996,362			899,271			816,263			746,873
Losses and loss settlement expenses	725,713			652,433			520,087			509,811			437,354
Amortization of deferred policy acquisition costs	207,746			202,892			180,183			161,310			147,175
Other underwriting expenses	103,628			83,540			83,631			79,117			73,626
Net income	44,870			49,918			85,320			52,376			67,456
Combined ratio(1)	104.0		%	100.3		%	92.0		%	97.8		%	94.8		%
Income Statement Data from Discontinued Operations:
Net premiums earned	$	61,368		$	87,270		$	79,195		$	61,391		$	60,654
Investment income	49,720			51,538			54,222			60,373			66,467
Revenues	115,713			140,585			135,647			125,631			130,169
Losses and loss settlement expenses	40,451			31,365			29,001			26,432			21,461
Increase in liability for future policy benefits	27,632			59,969			50,945			36,623			37,625
Other underwriting expenses	13,281			19,881			19,306			15,754			16,235
Interest on policyholders' accounts	18,525			20,079			23,680			30,245			35,163
Net income	6,153			786			3,806			6,761			8,684
Earnings Per Share Data:
Continuing operations:
Basic earnings per common share	$	1.79		$	1.94		$	3.41		$	2.07		$	2.67
Diluted earnings per common share	1.75			1.90			3.38			2.05			2.64
Discontinued operations:
Basic earnings per common share	0.24			0.03			0.15			0.27			0.34
Diluted earnings per common share	0.24			0.03			0.15			0.27			0.34
Other Supplemental Data:
Cash dividends declared per common share	$	1.09		$	0.97		$	0.86		$	0.78		$	0.69

(1) The combined ratio is a commonly used financial measure of property and casualty underwriting performance. A combined ratio below 100.0 percent generally indicates a profitable book of business.

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ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis should be read in conjunction with Part II, Item 6, "Selected Financial Data" and Part II, Item 8, "Financial Statements and Supplementary Data." Amounts (except per share amounts) are presented in thousands, unless otherwise noted.

FORWARD-LOOKING STATEMENTS

It is important to note that our actual results could differ materially from those projected in any forward-looking statements in this Form 10-K. Please refer to "Forward-Looking Information" and Part I, Item 1A, "Risk Factors" of this report for information concerning factors that could cause actual results to differ materially from the forward-looking statements contained in this Form 10-K.

BUSINESS OVERVIEW

Originally founded in 1946 as United Fire & Casualty Company, United Fire Group, Inc. ("UFG", "United Fire", the "Registrant", the "Company", "we", "us", "our") and its consolidated insurance company subsidiaries provide insurance protection for individuals and businesses through several regional companies. Our property and casualty insurance company subsidiaries are licensed in 46 states plus the District of Columbia and are represented by approximately 1,200 independent agencies. Our life insurance subsidiary is licensed in 37 states and is represented by approximately 1,600 independent agencies.

Discontinued Operations

On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company, to Kuvare. As a result, our life insurance business has been considered held for sale and accounted for as discontinued operations in the Consolidated Financial Statements of Cash Flows. All periods presented have been revised to show results from continuing and discontinued operations, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval. For more information, refer to Part II, Item 8, Note 17 "Discontinued Operations."

Reportable Segments

Prior to the announcement of the sale of our life insurance business, we have historically reported our operations in two business segments, each with a wide range of products:

• property and casualty insurance, which includes commercial lines insurance, personal lines insurance and assumed reinsurance; and

• life insurance, which includes deferred and immediate annuities, universal life products and traditional life (primarily single premium whole life) insurance products.

We manage these businesses separately, as they generally do not share the same customer base, and each has different products, pricing, and expense structures.

Subsequent to the announcement of the sale of our life insurance business on September 19, 2017, we operate and report one business segment, which contains our continuing operations. Our life insurance business is considered held for sale and reported as discontinued operations throughout this Form 10-K, unless otherwise noted. For more information, refer to Part II, Item 8, Note 10. "Segment Information".

Pooling Arrangement

All of our property and casualty insurance subsidiaries are members of an intercompany reinsurance pooling arrangement. On July 1, 2015, UFG Specialty Insurance Company entered the pooling arrangement. The Company's

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pooling arrangement permits the participating companies to rely on the capacity of the entire pool's capital and surplus, rather than being limited to policy exposures of a size commensurate with each participant’s own surplus level.

Geographic Concentration

For 2017, approximately 49.0 percent of our property and casualty statutory direct premiums written were written in Texas, California, Iowa, Missouri and Colorado.

Sources of Revenue and Expense

We evaluate profit or loss based upon operating and investment results. Profit or loss described in the following sections of this Management's Discussion and Analysis is reported on a pre-tax basis. Our primary sources of revenue are premiums and investment income. Major categories of expenses include losses and loss settlement expenses, future policy benefits, underwriting and other operating expenses and interest on policyholders' accounts.

Profit Factors

Our profitability is influenced by many factors, including price, competition, economic conditions, investment returns, interest rates, catastrophic events and other natural disasters, man-made disasters, state regulations, court decisions, and changes in the law. To manage these risks and uncertainties, we seek to achieve consistent profitability through strong agency relationships, exceptional customer service, fair and prompt claims handling, disciplined underwriting, superior loss control services, prudent management of our investments, appropriate matching of assets and liabilities, effective use of ceded reinsurance and effective and efficient use of technology.

MEASUREMENT OF RESULTS

Our consolidated financial statements are prepared on the basis of GAAP. We also prepare financial statements for each of our insurance company subsidiaries based on statutory accounting principles and file them with insurance regulatory authorities in the states where they do business.

Management evaluates our operations by monitoring key measures of growth and profitability. We believe that disclosure of certain non-GAAP financial measures enhances investor understanding of our financial performance. The following provides further explanation of the key measures management uses to evaluate our results:

Catastrophe losses is a commonly used non-GAAP financial measure which utilizes the designations of the Insurance Services Office ("ISO") and are reported with losses and loss settlement expense amounts net of reinsurance recoverables, unless specified otherwise. According to the ISO, a catastrophe loss is defined as a single unpredictable incident or series of closely related incidents that result in $25.0 million or more in U.S. industry-wide direct insured losses to property and that affect a significant number of insureds and insurers ("ISO catastrophe"). In addition to ISO catastrophes, we also include as catastrophes those events ("non-ISO catastrophes"), which may include U.S. or international losses, that we believe are, or will be, material to our operations, either in amount or in number of claims made. Management, at times, may determine for comparison purposes of our financial results that it is more meaningful to exclude extraordinary catastrophe losses and resulting litigation. The frequency and severity of catastrophic losses we experience in any year affect our results of operations and financial position. In analyzing the underwriting performance of our property and casualty insurance business, we evaluate performance both including and excluding catastrophe losses. Portions of our catastrophe losses may be recoverable under our catastrophe reinsurance agreements. We include a discussion of the impact of catastrophes because we believe it is meaningful for investors to understand the variability in our periodic earnings.

	Years Ended December 31,
(In Thousands)	2017		2016		2015
ISO catastrophes	$	66,421	$	57,932	$	25,380
Non-ISO catastrophes (1)	7,618		3,299		6,933
Total catastrophes	$	74,039	$	61,231	$	32,313

(1) Includes international assumed losses.

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RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015

FINANCIAL HIGHLIGHTS

	Years Ended December 31,									% Change
										2017		2016
(In Thousands)	2017			2016			2015			vs. 2016		vs. 2015
Revenues
Net premiums earned	$	997,492		$	936,131		$	851,695		6.6	%	9.9	%
Investment income, net of investment expenses	51,190			55,284			46,559			(7.4	)	18.7
Net realized investment gains	4,055			4,947			1,124			(18.0	)	340.1
Other income (loss)	—			—			(107		)	—		(100.0	)
Total revenues	$	1,052,737		$	996,362		$	899,271		5.7	%	10.8	%
Benefits, losses and expenses
Losses and loss settlement expenses	$	725,713		$	652,433		$	520,087		11.2	%	25.4	%
Amortization of deferred policy acquisition costs	207,746			202,892			180,183			2.4		12.6
Other underwriting expenses	103,628			83,540			83,631			24.0		(0.1	)
Total benefits, losses and expenses	$	1,037,087		$	938,865		$	783,901		10.5	%	19.8	%
Income from continuing operations before income taxes	$	15,650		$	57,497		$	115,370		(72.8	)%	(50.2	)%
Federal income tax expense (benefit)	(29,220		)	8,379			30,050			NM		(72.1	)%
Net income from continuing operations	$	44,870		$	49,118		$	85,320		(8.6	)%	(42.4	)%
Income from discontinued operations, net of tax	$	6,153		$	786		3,806			NM		(79.3	)%
Net income	$	51,023		$	49,904		$	89,126		2.2	%	(44.0	)%
GAAP Ratios:
Net loss ratio (without catastrophes)	65.4		%	63.2		%	57.2		%	3.5	%	10.5	%
Catastrophes - effect on net loss ratio	7.4		%	6.5		%	3.8		%	13.8	%	71.1	%
Net loss ratio(1)	72.8		%	69.7		%	61.0		%	4.4	%	14.3	%
Expense ratio(2)	31.2		%	30.6		%	31.0		%	2.0	%	(1.3	)%
Combined ratio(3)	104.0		%	100.3		%	92.0		%	3.7	%	9.0	%

NM = not meaningful

(1) The net loss ratio is calculated by dividing the sum of losses and loss settlement expenses by net premiums earned. We use the net loss ratio as a measure of the overall underwriting profitability of the insurance business we write and to assess the adequacy of our pricing. Our net loss ratio is meaningful in evaluating our financial results as reported in our Consolidated Financial Statements.

(2) The expense ratio is calculated by dividing nondeferred underwriting expenses and amortization of deferred policy acquisition costs by net premiums earned. The expense ratio measures a company's operational efficiency in producing, underwriting and administering its insurance business.

(3) The combined ratio is a commonly used financial measure of property and casualty underwriting performance. A combined ratio below 100.0 percent generally indicates a profitable book of business. The combined ratio is the sum of the net loss ratio and the underwriting expense ratio.

In 2017, our net income benefited from the Tax Act, which resulted in a tax benefit of $21.9 million for the year. Income from continuing operations before income taxes decreased 72.8 percent, from 2016, primarily driven by an 11.2 percent increase in losses and loss settlement expenses due to an increase in catastrophe losses and deterioration of our core loss ratio. A portion of this deterioration was driven by an increase in large losses, which we define as losses greater than $500 thousand, in our commercial automobile lines of business in the first three quarters of 2017. Also contributing to the decrease in income from continuing operations before income taxes was an increase in other underwriting expenses due to a deterioration in the profitability of the commercial and personal auto lines of business, which limits the amount of expenses which can be deferred into our deferred acquisition costs, partially

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offset by a decrease in post-retirement benefit expenses. These increases were partially offset by a 6.6 percent increase in net premiums earned.

In 2016, the decrease in net income was driven by a 25.4 percent increase in losses and loss settlement expenses due to an increase in catastrophe losses and deterioration of our core loss ratio. A portion of this deterioration was driven by an increase in large losses, which we define as losses greater than $500 thousand, in the commercial automobile and commercial fire & allied lines of business. The increase in losses and loss settlement expenses was partially offset by a 9.9 percent increase in net premiums earned.

Premiums from continuing operations

The following table shows our premiums written and earned for 2017, 2016 and 2015:

										% Change
(In Thousands)										2017		2016
Years ended December 31,	2017			2016			2015			vs. 2016		vs. 2015
Direct premiums written	$	1,065,207		$	1,006,123		$	926,500		5.9	%	8.6	%
Assumed premiums written	15,179			16,834			18,290			(9.8	)	(8.0	)
Ceded premiums written	(61,273		)	(57,988		)	(56,916		)	5.7		1.9
Net premiums written(1)	$	1,019,113		$	964,969		$	887,874		5.6	%	8.7	%
Less: change in unearned premiums	(21,588		)	(28,829		)	(36,336		)	25.1		20.7
Less: change in prepaid reinsurance premiums	(33		)	(9		)	157			(266.7	)	(105.7	)
Net premiums earned	$	997,492		$	936,131		$	851,695		6.6	%	9.9	%

(1) Net premiums written: Net premiums written is a non-GAAP measure. While not a substitute for any GAAP measure of performance, net premiums written is frequently used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. Net premiums written are the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. Management believes net premiums written are a meaningful measure for evaluating insurance company sales performance and geographical expansion efforts. Net premiums written for an insurance company consists of direct premiums written and reinsurance assumed, less reinsurance ceded. Net premiums earned is calculated on a pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policy in force. The difference between net premiums earned and net premiums written is the change in unearned premiums and change in prepaid reinsurance premiums.

Net Premiums Written

Net premiums written comprise direct and assumed premiums written, less ceded premiums written. Direct premiums written are the total policy premiums, net of cancellations, associated with policies issued and underwritten by our property and casualty insurance business. Assumed premiums written are the total premiums associated with the insurance risk transferred to us by other insurance and reinsurance companies pursuant to reinsurance contracts. Ceded premiums written is the portion of direct premiums written that we cede to our reinsurers under our reinsurance contracts. Net premiums earned are recognized ratably over the life of a policy and differ from net premiums written, which are recognized on the effective date of the policy.

Direct Premiums Written

Direct premiums written increased $59.1 million in 2017 as compared to 2016 due to organic growth from a combination of new business and geographical expansion. Written and earned premium growth were within management's expectations of 4 percent to 6 percent growth.

Direct premiums written increased $79.6 million in 2016 as compared to 2015 due to organic growth from a combination of new business and geographical expansion.

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Assumed Premiums Written

Assumed premiums written decreased $1.7 million in 2017 as compared to 2016 is due to a drop in reinsurance rates. In 2017, we renewed our participation in all of our assumed programs.

Assumed premiums written decreased $1.5 million in 2016 as compared to 2015 due to a drop in reinsurance rates. In 2016, we renewed our participation in all of our assumed programs.

Ceded Premiums Written

Direct and assumed premiums written are reduced by the ceded premiums that we pay to reinsurers. For 2017, we ceded 5.7 percent more premiums to reinsurers as a result of continued growth in direct premiums written offset by declining ceded reinsurance rates. For 2016, we ceded 1.9 percent more premiums to reinsurers as a result of continued growth in direct premiums written offset by declining ceded reinsurance rates.

Losses and Loss Settlement Expenses from continuing operations

Catastrophe Exposures

Catastrophe losses are inherent risks of the property and casualty insurance business. Catastrophic events include, without limitation, hurricanes, tornadoes, earthquakes, hailstorms, wildfires, high winds, winter storms and other natural disasters, along with man-made exposures to losses resulting from, without limitation, acts of war, acts of terrorism and political instability. Such events result in insured losses that can be, and may continue to be, a material factor in our results of operations and financial position, as the extent of losses from a catastrophe is a function of both the total amount of insured exposure in an area affected by the event and the severity of the event. Because the level of insured losses that may occur in any one year cannot be accurately predicted, these losses contribute to fluctuations in our year-to-year results of operations and financial position. Some types of catastrophes are more likely to occur at certain times within the year than others, which adds an element of seasonality to our property and casualty insurance claims. Our property and casualty insurance business experiences some seasonality with regard to premiums written, which are generally highest in January and July and lowest during the fourth quarter. Losses and loss settlement expenses incurred tend to remain consistent throughout the year, with the exception of catastrophe losses, which generally are highest in the second and third quarters. The frequency and severity of catastrophic events are difficult to accurately predict in any year. However, some geographic locations are more susceptible to these events than others.

We control our direct insurance exposures in regions that are prone to naturally occurring catastrophic events through a combination of geographic diversification, restrictions on the amount and location of new business production in such regions, and reinsurance. We regularly assess our concentration of risk exposures in natural catastrophe exposed areas. We have strategies and underwriting standards to manage these exposures through individual risk selection, subject to regulatory constraints, and through the purchase of catastrophe reinsurance coverage. We use catastrophe modeling and a risk concentration management tool to monitor and control our accumulations of potential losses in natural catastrophe exposed areas of the United States, such as the Gulf and East Coasts, as well as in areas of exposure in other countries where we are exposed to a portion of an insurer's underwriting risk under our assumed reinsurance contracts.

Overall, the models indicate increased risk estimates for our exposure to hurricanes in the U.S., but the impact of the models on our book of business varies significantly among the regions that we model for hurricanes. Based on our analysis, we have implemented more targeted underwriting and rate initiatives in some regions. We will continue to take underwriting actions and/or purchase additional reinsurance as necessary to reduce our exposure.

Catastrophe modeling generally relies on multiple inputs based on experience, science, engineering and history, and the selection of those inputs requires a significant amount of judgment. The modeling results may also fail to account for risks that are outside the range of normal probability or are otherwise unforeseen. Because of this, actual results may differ materially from those derived from our modeling assumptions.

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Despite our efforts to manage our catastrophe exposure, the occurrence of one or more severe natural catastrophic events in heavily populated areas could have a material effect on our results of operations, financial condition or liquidity.

The process of estimating and establishing reserves for losses incurred from catastrophic events is inherently uncertain and the actual ultimate cost of a claim, net of reinsurance recoveries, may vary materially from the estimated amount reserved. Although we reinsure a portion of our exposure, reinsurance may prove to be inadequate if a major catastrophic event exceeds our reinsurance limits or if we experience a number of small catastrophic events that individually fall below our reinsurance retention level.

Catastrophe Losses

In 2017, our pre-tax catastrophe losses were $74.0 million, an increase as compared to $61.2 million and an increase as compared to $32.3 million in 2016 and 2015, respectively. In 2017, the increase in catastrophe losses is primarily due to hurricanes (Harvey, Irma, Maria) in the third quarter and destructive California wildfires in the second half of the year. In 2017, our catastrophe losses included 50 catastrophes and our largest single pre-tax catastrophe loss totaled $9.0 million. Catastrophe losses in 2017 added 7.4 percentage points to the combined ratio, which is slightly above our historical 10-year average of 7.3 percentage points.

The increase in catastrophe losses in 2016 was primarily due to the number of catastrophes and an increase in severity. In 2016, our catastrophe losses included 41 catastrophes, where our largest single pre-tax catastrophe loss totaled $10.4 million. Catastrophe losses in 2016 added 6.5 percentage points to the combined ratio.

Catastrophe Reinsurance

In 2017, 2016 and 2015, we did not exceed our catastrophe reinsurance retention level of $20.0 million per event.

We use many reinsurers, both domestic and foreign, which helps us to avoid concentrations of credit risk associated with our reinsurance. All reinsurers we do business with must meet the following minimum criteria: capital and surplus of at least $250.0 million and an A.M. Best rating or an S&P rating of at least "A-." If a reinsurer is rated by both rating agencies, then both ratings must be at least an "A-."

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The following table represents the primary reinsurers we utilize and their financial strength ratings as of December 31, 2017:

Name of Reinsurer	A.M. Best	S&P Rating
Arch Reinsurance Company	A+	A+
Aspen Insurance UK Limited	A	A
Everst Re	A+	A+
FM Global	A+	N/A
General Reinsurance Corporation	A++	AA
Hannover Rueckversicherung AG (1) (2)	A+	AA-
Lloyd's	A	A+
Munich Re	A+	AA-
Odyssey Re	A	A-
Partner Re(1)(2)	A	A+
QBE Reinsurance Corporation (1)	A	A+
R&V Versicherung AG (2)	N/A	AA-
Renaissance Re	A+	AA-
SCOR Reinsurance Company(1)(2)	A+	AA-
Toa Re	A	A+
Tokio Millennium Re Ltd	A++	A+
Transatlantic Re	A+	A+

(1) Primary reinsurers participating in the property and casualty excess of loss programs.

(2) Primary reinsurers participating in the surety excess of loss program.

Refer to Part II, Item 8, Note 4 "Reinsurance" for further discussion of our reinsurance programs.

Terrorism Coverage

The Terrorism Risk Insurance Program Reauthorization Act of 2007 was signed into law on December 27, 2007. In January 2015, TRIPRA was signed into law. TRIPRA extends the Terrorism Risk Insurance Program until December 31, 2020; gradually increases the coverage trigger for shared terrorism losses between the federal government and the insurance industry to $200 billion per year (up from $100 billion); and gradually increases the industry-wide retention to $37.5 billion per year (up from $27.5 billion). TRIPRA coverage includes most direct commercial lines of business, including coverage for losses from nuclear, biological and chemical exposures if coverage was afforded by an insurer, with exclusions for commercial automobile insurance, burglary and theft insurance, surety, professional liability insurance and farm owners multiple peril insurance. Under TRIPRA, each insurer has a deductible amount, which is 20.0 percent of the prior year's direct commercial lines earned premiums for the applicable lines of business, and retention of 15.0 percent above the deductible. No insurer that has met its deductible shall be liable for the payment of any portion of that amount that exceeds the annual aggregate loss cap specified in TRIPRA. TRIPRA provides marketplace stability. As a result, coverage for terrorist events in both the insurance and reinsurance markets is often available. The amount of aggregate losses necessary for an act of terrorism to be certified by the U.S. Secretary of Treasury, the Secretary of State and the Attorney General was $100.0 million for 2017 and remains the same for 2018. Our TRIPRA deductible was $121.5 million for 2017 and our TRIPRA deductible will be $126.1 million for 2018. Our catastrophe and non-catastrophe reinsurance programs provide limited coverage for terrorism exposure excluding nuclear, biological and chemical-related claims.

2017 Results

In 2017, our losses and loss settlement expenses were 11.2 percent percent higher than 2016 and our net loss ratio increased 3.1 points due to an increase in catastrophe losses, which accounted for 0.9 percentage points of the increase, and an increase in large losses over $500 thousand in our commercial automobile lines of business in the first three quarters of 2017 and an increase in losses in our personal lines of business, primarily in personal auto and

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fire and allied lines of business. Catastrophe losses increased to $74.0 million in both our direct business and assumed reinsurance business as compared to $61.2 million in 2016.

2016 Results

In 2016, our losses and loss settlement expenses were 25.4 percent higher than 2015 and our net loss ratio increased 8.7 points due to an increase in catastrophe losses, which accounted for 2.7 percentage points of the increase, and an increase in large losses over $500 thousand in our commercial automobile and commercial fire & allied lines of business. Catastrophe losses increased to $61.2 million in both our direct business and assumed reinsurance business as compared to $32.3 million in 2015.

2015 Results

In 2015, our losses and loss settlement were impacted by a better performing book of business and lower catastrophe losses in both our direct business and assumed reinsurance business.

Reserve Development

For many liability claims, significant periods of time, ranging up to several years, and for certain construction defect claims, more than a decade, may elapse between the occurrence of the loss, the reporting of the loss to us and the settlement or other disposition of the claim. As a result, loss experience in the more recent accident years for the long-tail liability coverages has limited statistical credibility in our reserving process because a relatively small proportion of losses in these accident years are reported claims and an even smaller proportion are paid losses. In addition, long-tail liability claims are more susceptible to litigation and can be significantly affected by changing contract interpretations and the legal environment. Consequently, the estimation of loss reserves for long-tail coverages is more complex and subject to a higher degree of variability. Reserves for these long-tail coverages represent a significant portion of our overall carried reserves.

When establishing reserves and monitoring reserve adequacy, we analyze historical data and consider the potential impact of various loss development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long-tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific dollar impact of any individual factor on the development of reserves.

Our reserving philosophy is to reserve claims to their ultimate expected loss amount as soon as practicable after information about a claim becomes available. This approach tends to produce, on average, prudently conservative case reserves, which we expect to result in some level of favorable development over the course of settlement.

2017 Development

The property and casualty insurance business experienced $54.3 million of favorable development in our net reserves for prior accident years for the year ended December 31, 2017. The majority of favorable development came from two lines, commercial liability with $35.1 million favorable development and workers compensation with $19.2 million favorable development, partially offset by $6.3 million of unfavorable development for assumed reinsurance. All other lines combined $6.3 million favorable development with no single line experiencing more than $3.7 million of development, either favorable or unfavorable. Much of the favorable long-tail liability development continues to come from loss adjustment expense and is attributed to our continued litigation management efforts. There was also a reduction in reserves for incurred but not reported claims because our long tail liability has experienced fewer late reported claims than what was initially anticipated. The favorable workers compensation development is due to the combination of reductions in reserves for reported claims and reductions in reserves for incurred but not reported claims for both loss and loss adjustment expense.

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2016 Development

The property and casualty insurance business experienced $31.2 million of favorable development in our net reserves for prior accident years for the year ended December 31, 2016. The majority of favorable development came from two lines: commercial liability with $25.4 million of favorable development and workers compensation with $12.2 million of favorable development. The favorable development was offset by unfavorable development from commercial fire & allied lines with $6.4 million of unfavorable development and commercial automobile with $5.5 million of unfavorable development. During the twelve-month period ended December 31, 2016 all other lines combined development was $5.5 million of favorable development. The favorable development for the year ended December 31, 2016, is attributable to reductions in reserves for loss adjustment expense which continues to benefit from successful management of litigation expenses.

2015 Development

The property and casualty insurance business experienced $40.4 million of favorable development in our net reserves for prior accident years for the year ended December 31, 2015. Three lines in aggregate accounted for a majority of the favorable development. The largest single contributor was long-tail liability with $23.0 million of favorable development followed by workers' compensation with $22.1 million of favorable development and auto physical damage with $4.4 million of favorable development for the year ended December 31, 2015. The favorable development is attributable to reductions in reserves for reported claims as well as reductions in required reserves for incurred but not reported claims combined with continued successful management of litigation expenses. These reserve decreases were more than sufficient to offset claim payments. The favorable development was partially offset by adverse development, the majority coming from three lines which included property with $5.6 million of adverse development from an increase in severity and frequency of losses, assumed reinsurance with $8.1 million of adverse development due to prior year development of catastrophe losses and commercial auto liability with $2.8 million of adverse development due to an increase in frequency of losses in the year ended December 31, 2015. No other single line of business contributed a significant portion of the total development.

Reserve development amounts can vary significantly from year-to-year depending on a number of factors, including the number of claims settled and the settlement terms, and are subject to reallocation between accident years and lines of business.

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Net Loss Ratios by Line

The following table depicts our net loss ratios for 2017, 2016 and 2015:

Years ended December 31,	2017						2016						2015
(In Thousands)	Net Premiums Earned		Net Losses and Loss Settlement Expenses Incurred		Net Loss Ratio		Net Premiums Earned		Net Losses and Loss Settlement Expenses Incurred		Net Loss Ratio		Net Premiums Earned		Net Losses and Loss Settlement Expenses Incurred		Net Loss Ratio
Commercial lines
Other liability	$	306,480	$	121,054	39.5	%	$	289,982	$	130,748	45.1	%	$	261,303	$	130,904	50.1	%
Fire and allied lines	227,711		178,768		78.5		221,758		176,961		79.8		202,375		128,479		63.5
Automobile	250,465		266,272		106.3		214,009		211,882		99.0		185,970		152,558		82.0
Workers' compensation	104,166		71,053		68.2		103,605		74,051		71.5		95,672		47,106		49.2
Fidelity and surety	24,981		2,206		8.8		22,507		222		1.0		21,362		2,001		9.4
Other	1,829		312		17.1		1,745		498		28.5		2,158		428		19.8
Total commercial lines	$	915,632	$	639,665	69.9	%	$	853,606	$	594,362	69.6	%	$	768,840	$	461,476	60.0	%
Personal lines
Fire and allied lines	$	43,005	$	34,503	80.2	%	$	43,463	$	27,402	63.0	%	$	44,075	$	28,815	65.4	%
Automobile	27,046		28,997		107.2		25,207		23,123		91.7		24,120		17,817		73.9
Other	1,159		268		23.1		1,090		260		23.9		1,021		296		29.0
Total personal lines	$	71,210	$	63,768	89.5	%	$	69,760	$	50,785	72.8	%	$	69,216	$	46,928	67.8	%
Reinsurance assumed	$	10,650	$	22,280	209.2	%	$	12,765	$	7,286	57.1	%	$	13,639	$	11,683	85.7	%
Total	$	997,492	$	725,713	72.8	%	$	936,131	$	652,433	69.7	%	$	851,695	$	520,087	61.0	%

NM=Not meaningful

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Commercial Lines

The net loss ratio in our commercial lines of business, excluding assumed reinsurance, was 69.9 percent in 2017 compared to 69.6 percent in 2016 and 60.0 percent in 2015. The net loss ratio in 2017 was comparable to 2016 with an increase in the commercial auto loss ratio and fidelity and surety loss ratio and decreases in other liability and workers compensation. The change in 2016 as compared to 2015 was primarily the result of an increase in catastrophe losses and large losses, which we define as losses greater than $500 thousand, in our commercial automobile and commercial fire & allied lines of business.

Other Liability

Other liability is business insurance covering bodily injury and property damage arising from general business operations, accidents on the insured's premises and products manufactured or sold. Because of the long-tail nature of liability claims, significant periods of time, ranging up to several years, may elapse between the occurrence of the loss, the reporting of the loss to us and the settlement of the claim.

In recent years, we began to use our loss control department more extensively in an attempt to return this line of business to a higher level of profitability. For example, our loss control department has representatives who make multiple visits each year to businesses and job sites to ensure safety. We also do not renew accounts that no longer meet our underwriting or pricing guidelines. We avoid accounts that have become too underpriced for the risk.

Construction Defect Losses

Incurred losses from construction defect claims were $15.7 million in 2017 compared to $10.4 million and $3.6 million in 2016 and 2015, respectively. At December 31, 2017, we had $34.4 million in construction defect loss and loss settlement expense reserves (excluding IBNR reserves which are calculated at the overall other liability commercial line), which consisted of 1,857 claims. In comparison, at December 31, 2016, we had reserves of $22.3 million, excluding IBNR reserves, consisting of 1,382 claims. The increase in the incurred losses is due to an improved economic environment which increased construction activity in 2017. Our West Coast and Rocky Mountain regions continue to be the origin of the majority of the construction defect claim activity. The increase in reserves at December 31, 2017 is due to a increase in open claim counts.

Construction defect claims generally relate to allegedly defective work performed in the construction of structures such as apartments, condominiums, single family dwellings or other housing, as well as the sale of defective building materials. Such claims seek recovery due to damage caused by alleged deficient construction techniques or workmanship. The reporting of such claims can be quite delayed due to an extended statute of limitations, sometimes up to ten years. Court decisions have expanded insurers' exposure to construction defect claims as well. Defense costs are also a part of the insured expenses covered by liability policies and can be significant, sometimes greater than the cost of the actual paid claims.

We have exposure to construction defect liabilities in Colorado and surrounding states. We have historically insured small- to medium-sized contractors in this geographic area. In an effort to limit the number of future claims from multi-unit buildings, we implemented policy exclusions in 2009, later revised in 2010, that exclude liability coverage for contractors performing "residential structural" operations on any building project with more than 12 units or on single family homes in any subdivision where the contractor is working on more than 15 homes. The exclusions do not apply to remodeling or repair of an existing structure. We also changed our underwriting guidelines to add a professional liability exclusion when contractors prepare their own design work or blueprints and implemented the multi-family exclusion and tract home building limitation form for the state of Colorado and our other western states as a means to reduce our exposure in future years. When offering commercial umbrella coverage for structural residential contractors, limits of liability are typically limited to a maximum of $2.0 million per occurrence. Requests to provide additional insured status for "developers" are declined.

As a result of our acquisition of Mercer Insurance Group in 2011, we added construction defect exposure in the states of California, Nevada and Arizona. Mercer Insurance Group has been writing in these states for more than 20 years. In order to minimize our exposure to construction defect claims in this region, we continually review the

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coverage we offer and our pricing models. In an effort to limit our exposure from residential multi-unit buildings, we started including condominium and townhouse construction policy exclusions in 2012 for our contracting policies in this region. For the majority of our residential contractors we limit the size of any tracts the contractor is working on to 25 homes or less and do not include a continuous trigger with our designated work exclusion. In a majority of the policies in our small service, repair and remodel contractors program, we have a favorable new residential construction exclusion. We also apply strict guidelines when additional insured forms are required and changed our underwriting guidelines to limit our exposure to large, multi-party construction defect claims. 

Commercial Fire and Allied Lines

Commercial fire and allied lines include fire, allied lines, commercial multiple peril and inland marine. The insurance covers losses to an insured's property, including its contents, from weather, fire, theft or other causes. We provide this coverage through a variety of business policies.

The net loss ratio in 2017 as compared to 2016 improved slightly, decreasing 1.3 percentage points. The improvement comes from a decrease in reserves for incurred but not reported claims for the current year in the second half of 2017, which is attributable to lower than expected claim emergence from various storms that had occurred earlier in the year. The deterioration in the net loss ratio in 2016 as compared to 2015 was primarily attributable to an increase in severity in commercial fire losses and an increase in catastrophe losses.

Commercial Automobile

Our commercial automobile insurance covers physical damage to an insured's vehicle, as well as liabilities to third parties. Automobile physical damage insurance covers loss or damage to vehicles from collision, vandalism, fire, theft, flood or other causes. Automobile liability insurance covers bodily injury, damage to property resulting from automobile accidents caused by the insured, uninsured or underinsured motorists and the legal costs of defending the insured against lawsuits. The deterioration in our commercial automobile insurance line in 2017 as compared to 2016 was due to an increase in the number of severe losses of claims in the first three quarters of 2017. The deterioration in our commercial automobile insurance line in 2016 as compared to 2015 was due to an increase in frequency and severity of claims in 2016 due to an increase in miles driven by commercial vehicles.

Workers' Compensation

We consider our workers' compensation business to be a companion product; we rarely write stand-alone workers' compensation policies. Our workers' compensation insurance covers primarily small- to mid-size accounts. The improvement in our workers' compensation line of business in 2017 as compared to 2016 was due to the presence of relatively stronger claim reserves for prior accident years. As claims were paid and closed the release of reserves for reported claims was more than sufficient to offset claim payments. The deterioration in our workers' compensation line of business in 2016 as compared to 2015 was due to an increase in severity of claims of over $0.1 million and a decrease in favorable reserves development on prior year claims.

The challenges faced by workers' compensation insurance providers to attain profitability include the regulatory climates in some states that make it difficult to obtain appropriate premium rate increases and inflationary medical costs. Despite these pricing issues, we continue to believe that we can improve the results of this line of business. Consequently, we have increased the utilization of our loss control unit in the analysis of current risks, with the intention of increasing the quality of our workers' compensation book of business. We are currently using these modeling analytics to assist us in risk selection, and we will continue to evaluate the model results.

Fidelity and Surety

Our surety products guarantee performance and payment by our bonded principals. Our contract bonds protect owners from failure to perform on the part of our principals. In addition, our surety bonds protect material suppliers and subcontractors from nonpayment by our contractors. When surety losses occur, our loss is determined by estimating the cost to complete the remaining work and to pay the contractor's unpaid bills, offset by contract funds due to the contractor, reinsurance, and the value of any collateral to which we may have access.

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In 2017, the change in the loss ratio was primarily due to claims from a large contractor’s bankruptcy which occurred during the fourth quarter. In 2016, the change in the loss ratio was primarily due to salvage and subrogation received in the second quarter of 2016.

During 2017 the claims from the large contractor’s bankruptcy will, in aggregate, exceed our $1.5 million reinsurance retention level. During 2016 there was one claim that exceeded our $1.5 million reinsurance retention level. During 2015, there were two claims that exceeded our $1.5 million surety excess of loss reinsurance retention level.

Personal Lines

Our personal lines consist primarily of fire and allied lines (including homeowners) and automobile lines. In 2017 our net loss ratio deteriorated 16.7 percentage points as compared to 2016. The 2017 deterioration is attributable to increased frequency and severity for personal automobile as well as an increase in the volume of claims from homeowners. In 2016, the net loss ratio deteriorated 5.0 percentage points as compared to 2015, primarily attributable to an increase in claim frequency in our personal automobile line due to an increase in catastrophe losses.

For our personal lines, we use the CATography™ Underwriter tool, which gives us the ability to determine whether the premium we charge for an exposure is adequate in areas where hurricanes and earthquakes occur. We have also implemented predictive analytics and data prefill for our personal automobile line. Data prefill is a data accessing methodology that allows for a more complete profile of our customers at the agent's point of sale during the quotation process.

Assumed Reinsurance

Our assumed reinsurance is the business we choose to write by participating in programs insuring insurance companies. The net loss ratio deteriorated in 2017 primarily due to expected claims from three hurricanes (Harvey, Irma, and Maria) as well as expected claims from California wildfires. The net loss ratio improved in 2016 due to an increase in favorable reserve development on prior year claims and from a decrease in catastrophe losses assumed.

In 2017 and 2016, we renewed our participation in all of our assumed programs. In 2015, we renewed our participation in all of our assumed programs and added one new program to our portfolio.

Other Underwriting Expenses

Our underwriting expense ratio, which is a percentage of other underwriting expenses over net premiums earned, was 31.2 percent, 30.6 percent and 31.0 percent for 2017, 2016, and 2015, respectively. The underwriting expense ratio increased in 2017 primarily due to a deterioration in the profitability of the commercial and personal auto lines of business, which limits the amount of expenses which can be deferred into our deferred acquisition costs, partially offset by a decrease in post-retirement benefit expenses.

The underwriting expense ratio improved in 2016 due to a decrease in post-retirement benefit costs and contingent commission expenses.

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Discontinued Operations Results

	Years Ended December 31,							% Change
								2017		2016
(In Thousands)	2017		2016		2015			vs. 2016		vs. 2015
Revenues
Net premiums earned	$	61,368	$	87,270	$	79,195		(29.7	)%	10.2	%
Investment income, net	49,720		51,538		54,222			(3.5	)%	(5.0	)%
Net realized investment gains (losses)
Other-than-temporary impairment charges	—		—		(1,300		)	—	%	NM
All other net realized gains	4,008		1,156		3,022			246.7	%	(61.7	)%
Net realized investment gains	4,008		1,156		1,722			246.7	%	(32.9	)%
Other income	617		621		508			(0.6	)%	22.2	%
Total revenues	$	115,713	$	140,585	$	135,647		(17.7	)%	3.6	%
Benefits, Losses and Expenses
Losses and loss settlement expenses	$	40,451	$	31,365	$	29,001		29.0	%	8.2	%
Increase in liability for future policy benefits	27,632		59,969		50,945			(53.9	)%	17.7	%
Amortization of deferred policy acquisition costs	5,181		8,121		6,634			(36.2	)%	22.4	%
Other underwriting expenses	13,281		19,881		19,306			(33.2	)%	3.0	%
Interest on policyholders' accounts	18,525		20,079		23,680			(7.7	)%	(15.2	)%
Total benefits, losses and expenses	$	105,070	$	139,415	$	129,566		(24.6	)%	7.6	%
Income before income taxes	$	10,643	$	1,170	$	6,081		NM		(80.8	)%

NM =Not meaningful

United Life underwrites all of our life insurance business. Our principal life insurance products are deferred and immediate annuities, universal life products and traditional life (primarily single premium whole life insurance) products. We also underwrite and market other traditional products, including term life insurance and whole life insurance. Deferred and immediate annuities (55.9 percent), traditional life products (30.7 percent), universal life products (12.3 percent), and other life products (1.1 percent) comprised our 2017 life insurance premium revenues, as determined on the basis of statutory accounting principles. We do not write variable annuities or variable insurance products.

Income before income taxes from our discontinued operations totaled $10.6 million in 2017 compared to $1.2 million in 2016 and $6.1 million in 2015. The increase in income before income taxes from 2016 to 2017 was primarily due to a smaller increase in liability for future benefits and a decrease in underwriting expenses and offset by a decrease in net premiums earned and an increase in losses and loss settlement expenses. The decrease in underwriting expenses was due to two items. First, a decrease in non-deferrable commissions paid from lower sales of single premium whole life policies ("SPWL"). Second, due to strategic changes made at the beginning of 2017 to increase profitability of our life products through pricing changes and restructuring of our commissions. Also impacting the results, was an increase in death benefits paid compared to the same periods in the prior year.

The decrease in income before income taxes from 2015 to 2016 was primarily a result of a decrease in net investment income, an increase in losses and loss settlement expenses and an increase in the increase in liability for future policy benefits, all partially offset by an increase in net premiums earned from higher sales of SPWL policies and a decrease in interest on policyholders' accounts due to the continued net withdrawals of annuity products.

Federal Income Taxes

We reported a federal income tax benefit on a consolidated basis of $24.7 million or 94.1 percent of per-tax income in 2017 and federal income tax expense of $8.8 million or 14.9 percent of pre-tax income and $32.3 million or 26.6 percent of pre-tax income in 2016 and 2015, respectively. Our effective federal tax rate varied from the statutory federal income tax expense rate of 35.0 percent in each year, due primarily to our portfolio of tax-exempt securities.

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In addition, in 2017 our effective tax rate was impacted by the Tax Act, which was enacted on December 22, 2017. The Tax Act significantly revised the U.S. corporate income tax laws including lowering the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018.

In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of December 31, 2017 we have not completed accounting for the tax effects of enactment of the Tax Act, however for certain items, we have made a reasonable estimate of the effects on our deferred tax balances. For other items where we could not make a reasonable estimate, we are still using existing accounting guidance and the provisions of the tax laws that were in place prior to the enactment. For the items where we were able to determine a reasonable estimate, we recognized a provisional amount in income tax expense from continuing operations of $21,884. The Company will continue to refine this estimated provisional adjustment as we gain a more thorough understanding of the tax law and the Company will take future guidance into consideration when it becomes available.

As of December 31, 2017, we had a net operating loss ("NOL") carryforward of $1.6 million, which is due to our purchase of American Indemnity Financial Corporation in 1999. No NOLs will expire in 2017. 

Due to our determination that we may not be able to fully realize the benefits of the NOLs acquired in the purchase of American Indemnity Financial Corporation, which are only available to offset the future taxable income of our property and casualty insurance operations and are further limited as to the amount that can be utilized in any given year, we have recorded a valuation allowance against these NOLs that totaled $0.3 million at December 31, 2017. Based on a yearly review, we determine whether the benefit of the NOLs can be realized, and, if so, the decrease in the valuation allowance is recorded as a reduction to current federal income tax expense. If NOLs expire during the year, the decrease in the valuation allowance is offset with a corresponding decrease to the deferred income tax asset. The valuation allowance was reduced by $0.5 million in 2017 due to the realization of $1.6 million in NOLs.

As of December 31, 2017, we had $6.0 million of alternative minimum tax credit carryforwards.

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INVESTMENTS

Investment Environment

The markets began 2017 with optimism as a new administration arrived in Washington touting an aggressive agenda of fiscal stimulus that included tax reform, regulatory rollbacks, and infrastructure spending. By the end of the year, the most significant tax reform of the last 30 years was signed into law, and the regulatory framework for American businesses was viewed as substantially more accommodative.

On the economic front, the U.S. expansion continued unabated and bullish sentiment drove market psychology despite heightened geopolitical uncertainty. There were two consecutive quarters of GDP growth above 3 percent, unemployment reached a multi-decade low, and growth in wages was steady. Financial markets responded to this favorable environment in kind. Risk outperformed for the year with emerging market ("EM") equities leading all asset class gains, followed by developed market and U.S. stocks; each producing +20 percent total returns. In fixed income, sovereign debt underperformed as global yields generally moved higher. Credit produced solid returns in 2017, led by EM and U.S. corporates. The year’s gains did not come without risk. Equity valuations continued to stretch beyond long-term averages, even as forward earnings guidance did not always keep pace.

The U.S. Federal Reserve maintained its normalization policy by raising their Funds Rate 25 basis points three times throughout the year, which steadily flattened the U.S. Treasury curve. Front-end rates increased 75 to 90 basis points, while the long-end fell 30 to 35 basis points. Investors worried over whether the shift in monetary policy may be too aggressive and a flatter curve is signaling recession. Geopolitically, a looming conflict in Southeast Asia, the impact of "Brexit" on trade relationships across Europe, the U.S. administration’s stance on trade negotiations and conflict in the Middle East all presented challenges. However, the global investment landscape is relatively strong in spite of these headwinds. Market fundamentals remain positive overall and the technical backdrop is supportive. In spite of this, a high degree of vigilance in investment management is prudent, as nearly all asset class valuations ended the year with lofty expectations for economic growth and performance.

Investment Philosophy

The Company's assets are invested to preserve capital and maximize after-tax returns while maintaining an appropriate balance of risk. The return on our portfolio is an important component of overall financial results, but quality and safety of principal is the highest priority of our investment program. Our general investment philosophy is to purchase financial instruments with the expectation that we will hold them to their maturity. However, active management of our available-for-sale portfolio is considered necessary to appropriately manage risk, achieve portfolio objectives and maximize investment income as market conditions change. 

We work with our insurance company subsidiaries to develop an appropriate investment strategy that aligns with their business needs and supports United Fire's strategic plan and risk appetite.  The portfolio is structured so as to be in compliance with state insurance laws that prescribe the quality, concentration and type of investments that may be made by insurance companies.  All but a small portion of our investment portfolio is managed internally.

Investment Portfolio

Our invested assets from continuing operations at December 31, 2017 totaled $1.9 billion, compared to $1.8 billion at December 31, 2016, an increase of $117.1 million. At December 31, 2017, fixed maturity securities and equity securities comprised 82.2 percent and 15.2 percent of our investment portfolio, respectively. Because the primary purpose of the investment portfolio is to fund future claims payments, we utilize a conservative investment philosophy, investing in a diversified portfolio of high-quality, intermediate-term taxable corporate bonds, taxable U.S. government and government agency bonds and tax-exempt U.S. municipal bonds. Our overall investment strategy is to stay fully invested (i.e., minimize cash balances). If additional cash is needed we have an ability to borrow funds available under our revolving credit facility.

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Composition

We develop our investment strategies based on a number of factors, including estimated duration of reserve liabilities, short- and long-term liquidity needs, projected tax status, general economic conditions, expected rates of inflation and regulatory requirements. We administer our investment portfolio based on investment guidelines approved by management and the investment committee of our Board of Directors that comply with applicable statutory regulations.

The composition of our investment portfolio at December 31, 2017 is presented at carrying value in the following table:

	Continuing Operations				Discontinued Operations
	Property & Casualty Insurance				Life Insurance				Total
			Percent				Percent				Percent
(In Thousands)			of Total				of Total				of Total
Fixed maturities: (1)
Held-to-maturity	$	150	—	%	$	34	—	%	$	184	—	%
Available-for-sale	1,535,070		81.3		1,430,025		96.7		2,965,095		88.0
Trading securities	16,842		0.9		—		—		16,842		0.5
Equity securities:
Available-for-sale	280,913		14.9		23,653		1.6		304,566		9.0
Trading securities	6,431		0.3		—		—		6,431		0.2
Mortgage loans	—		—		3,435		0.2		3,435		0.1
Policy loans	—		—		5,815		0.4		5,815		0.2
Other long-term investments	49,352		2.6		16,437		1.1		65,789		2.0
Short-term investments	175		—		—		—		175		—
Total	$	1,888,933	100.0	%	$	1,479,399	100.0	%	$	3,368,332	100.0	%

(1) Available-for-sale and trading fixed maturities are carried at fair value. Held-to-maturity fixed maturities are carried at amortized cost.

At December 31, 2017, we classified $1.5 billion, or 98.9 percent, of our continuing operations fixed maturities portfolio as available-for-sale, compared to $1.5 billion, or 99.0 percent, at December 31, 2016. Available-for-sale securities are carried at fair value, with changes in fair value recognized as a component of accumulated other comprehensive income in stockholders' equity. We classify our remaining fixed maturities as held-to-maturity or trading. We record held-to-maturity securities at amortized cost. We record trading securities, primarily convertible redeemable preferred debt securities, at fair value, with any changes in fair value recognized in earnings.

As of December 31, 2017 and 2016, we did not have direct exposure to investments in subprime mortgages or other credit enhancement vehicles.

Credit Quality

The following table shows the composition of fixed maturity securities held in our available-for-sale, held-to-maturity and trading security portfolios by credit rating for both continuing and discontinued operations at December 31, 2017 and 2016. Information contained in the table is generally based upon the issue credit ratings

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provided by Moody's, unless the rating is unavailable, in which case we obtain it from Standard & Poor's.

(In Thousands)	December 31, 2017				December 31, 2016
Rating	Carrying Value		% of Total		Carrying Value		% of Total
AAA	$	885,000	29.7	%	$	782,329	26.9	%
AA	839,210		28.1		857,946		29.4
A	616,787		20.7		651,696		22.4
Baa/BBB	585,968		19.6		554,475		19.0
Other/Not Rated	55,156		1.9		66,268		2.3
	$	2,982,121	100.0	%	$	2,912,714	100.0	%

Duration

Our investment portfolio is invested primarily in fixed maturity securities whose fair value is susceptible to market risk, specifically interest rate changes. Duration is a measurement used to quantify our inherent interest rate risk and analyze our ability to match our invested assets to our reserve liabilities. If our invested assets and reserve liabilities have similar durations, then any change in interest rates will have an equal effect on these accounts. The primary purpose for matching invested assets and reserve liabilities is liquidity. With appropriate matching, our investments will mature when cash is needed, preventing the need to liquidate other assets prematurely. Mismatches in the duration of assets and liabilities can cause significant fluctuations in our results of operations.

Group

The weighted average effective duration of our portfolio of fixed maturity securities was 5.0 years at December 31, 2017 compared to 5.2 years at December 31, 2016.

Continuing Operations - Property and Casualty Insurance Business

The weighted average effective duration of our portfolio of fixed maturity securities was 5.4 years at December 31, 2017 compared to 5.4 years at December 31, 2016.

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at December 31, 2017, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

(In Thousands)	Held-To-Maturity				Available-For-Sale				Trading
	Amortized		Fair		Amortized		Fair		Amortized		Fair
December 31, 2017	Cost		Value		Cost		Value		Cost		Value
Due in one year or less	$	—	$	—	$	37,899	$	38,144	$	2,225	$	2,835
Due after one year through five years	150		150		204,494		208,353		9,055		10,547
Due after five years through 10 years	—		—		394,107		402,799		1,302		1,156
Due after 10 years	—		—		694,850		700,879		2,000		2,304
Asset-backed securities	—		—		3,175		3,535		—		—
Mortgage-backed securities	—		—		9,205		9,231		—		—
Collateralized mortgage obligations	—		—		172,880		172,129		—		—
	$	150	$	150	$	1,516,610	$	1,535,070	$	14,582	$	16,842

Discontinued Operations - Life InsuranceBusiness

The weighted average effective duration of our portfolio of fixed maturity securities at December 31, 2017 was 4.6 years compared to 4.9 years at December 31, 2016.

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The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at December 31, 2017, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

(In Thousands)	Held-To-Maturity				Available-For-Sale
	Amortized		Fair		Amortized		Fair
December 31, 2017	Cost		Value		Cost		Value
Due in one year or less	$	—	$	—	$	59,551	$	59,850
Due after one year through five years	—		—		544,878		554,907
Due after five years through 10 years	—		—		429,150		436,561
Due after 10 years	—		—		81,803		83,208
Asset-backed securities	—		—		1,107		1,101
Mortgage-backed securities	34		34		4,623		4,460
Collateralized mortgage obligations	—		—		291,179		289,938
	$	34	$	34	$	1,412,291	$	1,430,025

Investment Results

We invest the premiums received from our policyholders and annuitants in order to generate investment income, which is an important component of our revenues and profitability. The amount of investment income that we are able to generate is affected by many factors, some of which are beyond our control. Some of these factors are volatility in the financial markets, economic growth, inflation, changes in interest rates, world political conditions, terrorist attacks or threats of terrorism, adverse events affecting other companies in our industry or the industries in which we invest and other unpredictable national or world events. Net investment income from continuing operations decreased 7.4 percent in 2017, compared with the same period of 2016, primarily due to changes in value of our investments in limited liability partnerships, specifically related to financial institutions partially offset by an increase in invested assets. The valuation of our investments in limited liability partnerships varies from period to period due to current equity market conditions. We expect to maintain our investment philosophy of purchasing quality investments rated investment grade or better.

We regularly monitor the difference between our cost basis and the estimated fair value of our investments. Our accounting policy for impairment recognition requires other-than-temporary impairment charges to be recorded when we determine that it is more likely than not that we will be unable to collect all amounts due according to the contractual terms of the fixed maturity security or that the anticipated recovery in fair value of the equity security will not occur in a reasonable amount of time. Impairment charges on investments are recorded based on the fair value of the investments at the measurement date or based on the value calculated using a discounted cash flow model. Factors considered in evaluating whether a decline in value is other-than-temporary include: the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; our intention to hold the investment; and the likelihood that we will be required to sell the investment.

Changes in unrealized gains and losses on available-for-sale securities do not affect net income and earnings per share but do impact comprehensive income, stockholders' equity and book value per share. We believe that any unrealized losses on our available-for-sale securities at December 31, 2017 are temporary based upon our current analysis of the issuers of the securities that we hold and current market conditions. It is possible that we could recognize impairment charges in future periods on securities that we own at December 31, 2017 if future events and information cause us to determine that a decline in value is other-than-temporary. However, we endeavor to invest in high quality assets to provide protection from future credit quality issues and corresponding other-than-temporary impairment write-downs.  

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Net Investment Income

In 2017, our investment income, net of investment expenses, decreased $5.9 million to $100.9 million as compared to 2016, primarily due to the change in value of our investments in limited liability partnerships, specifically related to financial institutions.

In 2016, our investment income, net of investment expenses, increased $6.0 million to $106.8 million as compared to 2015, primarily due to the change in value of our investments in limited liability partnerships, specifically related to financial institutions.

The following table summarizes the components of net investment income:

(In Thousands) Years Ended December 31,	2017			2016		2015
Investment income from continuing operations:
Interest on fixed maturities	$	44,784		$	43,147	$	41,859
Dividends on equity securities	7,108			6,448		6,421
Income on other long-term investments
Interest	6,870			1,200		1,200
Change in value (1)	(2,812		)	10,178		2,313
Interest on short-term investments	120			47		3
Interest on cash and cash equivalents	1,125			352		234
Other	300			422		433
Total investment income from continuing operations	$	57,495		$	61,794	$	52,463
Less investment expenses	6,305			6,510		5,904
Net investment income from continuing operations	$	51,190		$	55,284	$	46,559
Net investment income from discontinued operations	49,720			51,538		54,222
Net investment income	$	100,910		$	106,822	$	100,781

(1) Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.

In 2017, 77.9 percentof our gross investment income from continuing operations originated from interest on fixed maturities, compared to 69.8 percent and 79.8 percent in 2016 and 2015, respectively.

The following table details our annualized yield on average invested assets from both continuing operations and discontinued operations for 2017, 2016 and 2015, which is based on our invested assets (including money market accounts) at the beginning and end of the year divided by net investment income:

(In Thousands)
Years ended December 31,	Average Invested Assets		Investment Income, Net		Annualized Yield on Average Invested Assets
2017	$	3,333,809	$	100,910	3.0	%
2016	3,223,014		106,822		3.3	%
2015	3,181,311		100,781		3.2	%

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Net Realized Investment Gains and Losses

The following table summarizes the components of our net realized investment gains or losses:

(In Thousands) Years Ended December 31,	2017		2016			2015
Net realized investment gains (losses) from continuing operations:
Fixed maturities:
Available-for-sale	$	829	$	1,004		$	814
Trading securities
Change in fair value	924		189			(1,352		)
Sales	244		931			1,381
Equity securities:
Available-for-sale	1,553		2,359			1,977
Trading securities
Change in fair value	332		301			(448		)
Sales	57		(6		)	66
Other long-term investments	—		—			(1,314		)
Cash equivalents	—		169			—
Real Estate	116		—			$	—
Total net realized investment gains from continuing operations	$	4,055	$	4,947		$	1,124
Total net realized investment gains from discontinued operations	4,008		1,156			1,722
Total net realized investment gains	$	8,063	$	6,103		$	2,846

Net Unrealized Investment Gains and Losses

As of December 31, 2017, net unrealized investment gains, after tax, totaled $214.9 million compared to $133.9 million and $128.4 million as of December 31, 2016 and 2015, respectively. The increase in net unrealized investment gains in 2017 is primarily the result of a decrease in interest rates, which positively impacted the valuation of our fixed maturity security portfolio during 2017 and an increase in the fair value of our equity security portfolio. Our net unrealized investment gains also increased due to the decrease in the tax rate from the Tax Act enactment.

The increase in unrealized gains in 2016 is the result of an increase in the fair value of the equity securities portfolio due to an increase in the financial markets, partially offset by a decline in the fair value of the fixed maturity portfolio due to an increase in interest rates.

The following table summarizes the change in our net unrealized investment gains (losses):

(In Thousands) Years Ended December 31,	2017			2016			2015
Changes in net unrealized investment gains (losses):
Available-for-sale fixed maturity securities	$	25,573		$	(21,271	)	$	(37,621	)
Equity securities	40,168			34,179			(6,459		)
Deferred policy acquisition costs	119			(4,410		)	11,380
Income tax effect	(21,545		)	(2,975		)	11,446
Accumulated effect of change in enacted tax rate	36,658			—			—
Total change in net unrealized investment gains, net of tax	$	80,973		$	5,523		$	(21,254	)

Market Risk

Our Consolidated Balance Sheets include financial instruments whose fair values are subject to market risk. The active management of market risk is integral to our operations. Market risk is the potential for loss due to a decrease in the fair value of securities resulting from uncontrollable fluctuations, such as: interest rate risk, equity price risk,

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foreign exchange risk, credit risk, inflation, or geopolitical conditions. Our primary market risk exposures are: changes in interest rates, deterioration of credit quality in specific issuers, sectors or the economy as a whole, and an unforeseen decrease in the liquidity of securities we hold. We have no foreign exchange risk.

Interest Rate Risk

Interest rate risk is the price sensitivity of a fixed income maturity security or portfolio of securities to changes in level of interest rates. Generally, there is an inverse relationship between changes in interest rates and changes in the price of a fixed income/maturity security. Plainly stated, if interest rates go up (down), bond prices go down (up). A vast majority of our holdings are fixed income maturity and other interest rate sensitive securities that will decrease (increase) in value as interest rates increase (decrease). While it is generally our intent to hold our investments in fixed maturity securities to maturity, we have classified a majority of our fixed maturity portfolio as available-for-sale. Available-for-sale fixed income maturity securities are carried at fair value on the Consolidated Balance Sheets with unrealized gains or losses reported net of tax in Accumulated Other Comprehensive Income. A change in the prevailing interest rates generally translates into a change in the fair value of our fixed income/maturity securities, and by extension, our overall book value.

Market Risk and Duration

We analyze potential changes in the value of our investment portfolio due to the market risk factors noted above within the overall context of asset and liability management. A technique we use in the management of our investment portfolio is the calculation of duration. Our actuaries estimate the payout pattern of our reserve liabilities to determine their duration, which is the present value of the weighted average payments expressed in years. We then establish a target duration for our investment portfolio so that at any given time the estimated cash generated by the investment portfolio will closely match the estimated cash required for the payment of the related reserves. We structure the investment portfolio to meet the target duration to achieve the required cash flow, based on liquidity and market risk factors.

Duration relates primarily to life insurance business because the long-term nature of these reserve liabilities increases the importance of projecting estimated cash flows over an extended time frame. At December 31, 2017, the life insurance business had $611.9 million in deferred annuity liabilities for which investments in fixed maturity securities were specifically allocated.

The duration of the life insurance business's investment portfolio must take into consideration interest rate risk. This is accomplished through the use of sensitivity analysis, which measures the price sensitivity of the fixed maturities to changes in interest rates. The alternative valuations of the investment portfolio, given the various hypothetical interest rate changes utilized by the sensitivity analysis, allow management to revalue the potential cash flow from the investment portfolio under varying market interest rate scenarios. Duration can then be recalculated at the differing levels of projected cash flows.

Impact of Interest Rate Changes

The amounts set forth in the following table detail the impact of hypothetical interest rate changes on the fair value of fixed maturity securities held at December 31, 2017 for both continuing operations and discontinued operations. The sensitivity analysis measures the change in fair values arising from immediate changes in selected interest rate scenarios. We employed hypothetical parallel shifts in the yield curve of plus or minus 100 and 200 basis points in the simulations. Additionally, based upon the yield curve shifts, we employ estimates of prepayment speeds for mortgage-related products and the likelihood of call or put options being exercised within the simulations. According to this analysis, at current levels of interest rates, the duration of the investments supporting the deferred annuity liabilities is 1.3 years longer than the projected duration of the liabilities. If interest rates increase by 100 or 200 basis points, the duration of the investments supporting the deferred annuity liabilities would be 1.9 years and 2.6 years longer, respectively, than the projected duration of the liabilities.

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The selection of a 100-basis-point and 200-basis-point increase or decrease in interest rates should not be construed as a prediction by our management of future market events, but rather as an illustration of the potential impact of an event.

December 31, 2017	-200 Basis		-100 Basis				+100 Basis		+ 200 Basis
(In Thousands)	Points		Points		Base		Points		Points
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	164	$	157	$	150	$	144	$	138
Mortgage-backed securities	34		34		34		33		33
Total Held-to-Maturity Fixed Maturities	$	198	$	191	$	184	$	177	$	171
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	17,764	$	17,319	$	16,891	$	16,478	$	16,078
U.S. government agency	128,008		125,659		122,168		114,089		104,790
States, municipalities and political subdivisions
General obligations:
Midwest	120,617		115,198		109,696		103,281		96,647
Northeast	53,374		50,984		48,641		45,959		43,036
South	157,465		149,584		141,519		132,046		122,255
West	126,775		119,874		113,011		105,319		97,498
Special revenue:
Midwest	178,089		168,570		158,744		147,044		135,317
Northeast	92,227		86,044		79,760		72,772		65,925
South	302,652		283,580		263,512		240,270		217,754
West	180,577		169,676		158,307		145,118		132,239
Foreign bonds	55,232		53,973		52,753		51,565		50,410
Public utilities	228,371		218,485		209,144		200,243		191,794
Corporate bonds
Energy	101,889		98,388		95,053		91,806		88,685
Industrials	241,265		231,207		221,707		212,661		204,058
Consumer goods and services	202,563		194,188		186,257		178,652		171,380
Health care	81,510		78,382		75,408		72,562		69,844
Technology, media and telecommunications	163,508		155,992		148,979		142,403		136,246
Financial services	308,825		295,604		283,151		271,088		259,404
Mortgage backed securities	14,053		13,986		13,691		13,204		12,567
Collateralized mortgage obligations
Government national mortgage association	172,630		167,268		157,483		145,198		132,208
Federal home loan mortgage corporation	214,067		208,963		199,152		185,680		170,990
Federal national mortgage association	113,469		110,647		105,432		98,375		90,653
Asset-backed securities	4,813		4,718		4,636		4,560		4,489
Total Available-For-Sale Fixed Maturities	$	3,259,743	$	3,118,289	$	2,965,095	$	2,790,373	$	2,614,267
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	2,352	$	2,284	$	2,220	$	2,157	$	2,096
Consumer goods and services	1,642		1,588		1,535		1,484		1,436
Health care	4,374		4,039		3,741		3,493		3,285
Financial services	5,670		5,618		5,566		5,407		5,222
Technology, media and telecommunications	1,264		1,242		1,221		1,201		1,180
Redeemable preferred stock	2,559		2,559		2,559		2,559		2,559
Total Trading Fixed Maturities	$	17,861	$	17,330	$	16,842	$	16,301	$	15,778
Total Fixed Maturity Securities	$	3,277,802	$	3,135,810	$	2,982,121	$	2,806,851	$	2,630,216

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To the extent actual results differ from the assumptions utilized, our duration and interest rate measures could be significantly affected. As a result, these calculations may not fully capture the impact of nonparallel changes in the relationship between short-term and long-term interest rates.

Equity Price Risk

Equity price risk is the potential loss arising from changes in the fair value (i.e., market price) of equity securities held in our portfolio. Changes in the price of an equity security may be due to a change in the future earnings capacity or strategic outlook of the security issuer, and what investors are willing to pay for those future earnings and related strategy. The carrying values of our equity securities are based on quoted market prices, from an independent source, as of the balance sheet date. Market prices of equity securities, in general, are subject to fluctuations that could cause the amount to be realized upon the future sale of the securities to differ significantly from the current reported value. The fluctuations may result from perceived changes in the underlying economic characteristics of the security issuer, the relative price of alternative investments, general market conditions, and supply/demand factors related to a particular security.

Impact of Price Change

The following table details the effect on the fair value of our investments in equity securities for both continuing and discontinued operations for a positive and negative 10 percent price change at December 31, 2017:

(In Thousands)	-10%		Base		+10%
Estimated fair value of equity securities	$	258,610	$	287,344	$	316,078

Foreign Currency Exchange Rate Risk

Foreign currency exchange rate risk arises from the possibility that changes in foreign exchange rates will impact our transactions with foreign reinsurers relating to the settlement of amounts due to or from foreign reinsurers in the normal course of business. We consider this risk to be immaterial to our operations.

Credit Risk

Credit risk is the willingness and ability of a borrower to repay on time and in full any principal and interest due to the lender. Losses related to credit risk are realized through the income statement and have a direct impact on the earnings of UFG. Given the vast majority of our holdings are fixed income maturity securities, we view credit risk as our primary investment risk. Our internal Investment Department has developed and maintains a rigorous underwriting process to analyze and measure the expected frequency and severity of loss (i.e., credit quality) for government, agency, municipal, structured security, and corporate bond issuers. The objective is to maintain the appropriate balance of risk in our portfolio, consistent with our Investment Policy Statement and conservative investment style, and ensure the portfolio is compensated appropriately for the credit risk it holds. We do have within our municipal bond holdings a small number of securities whose ratings were enhanced by third-party insurance for the payment of principal and interest in the event of an issuer default. Of the insured municipal securities in our investment portfolio, 99.1 percent and 98.9 percent were rated "A" or above, and 93.7 percent and 93.2 percent were rated "AA" or above at December 31, 2017 and 2016, respectively, without the benefit of insurance. Due to the underlying financial strength of the issuers of the securities, we believe that the loss of insurance would not have a material impact on our operations, financial position, or liquidity.

We have no direct exposure in any of the guarantors of our investments. Our largest indirect exposure with a single guarantor totaled $20.0 million or 20.8 percent of our insured municipal securities at December 31, 2017, as compared to $32.9 million or 19.1 percent at December 31, 2016. Our five largest indirect exposures to financial guarantors accounted for 66.6 percent and 63.9 percent of our insured municipal securities at December 31, 2017 and 2016, respectively.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity measures our ability to generate sufficient cash flows to meet our short- and long-term cash obligations. Our cash inflows are primarily a result of the receipt of premiums, annuity deposits, reinsurance recoveries, sales or maturities of investments, and investment income. Cash provided from these sources is used to fund the payment of losses and loss settlement expenses, policyholder benefits under life insurance contracts, annuity withdrawals, the purchase of investments, operating expenses, dividends, pension plan contributions, and in recent years, common stock repurchases.

We monitor our capital adequacy to support our business on a regular basis. The future capital requirements of our business will depend on many factors, including our ability to write new business successfully and to establish premium rates and reserves at levels sufficient to cover losses. Our ability to underwrite is largely dependent upon the quality of our claims paying and financial strength ratings as evaluated by independent rating agencies. In particular, we require (1) sufficient capital to maintain our financial strength ratings, as issued by various rating agencies, at a level considered necessary by management to enable our insurance company subsidiaries to compete and (2) sufficient capital to enable our insurance company subsidiaries to meet the capital adequacy tests performed by regulatory agencies in the United States.

Cash outflows may be variable because of the uncertainty regarding settlement dates for losses. In addition, the timing and amount of individual catastrophe losses are inherently unpredictable and could increase our liquidity requirements. The timing and amount of reinsurance recoveries may be affected by reinsurer solvency and reinsurance coverage disputes.

Historically, we have generated substantial cash inflows from operations. It is our policy to invest the cash generated from operations in securities with maturities that, in the aggregate, correlate to the anticipated timing of payments for losses and loss settlement expenses and future policyholder benefits of the underlying insurance policies, and annuity withdrawals. The majority of our assets are invested in available-for-sale fixed maturity securities.

The following table displays a summary of cash sources and uses in 2017, 2016 and 2015 from continuing and discontinued operations:

Cash Flow Summary	Years Ended December 31,
(In Thousands)	2017			2016			2015
Cash provided by (used in)
Operating activities	$	170,094		$	214,384		$	189,999
Investing activities	(61,985		)	(112,403		)	(36,286		)
Financing activities	(107,549		)	(97,577		)	(137,837		)
Net increase in cash and cash equivalents	$	560		$	4,404		$	15,876

In the Consolidated Statement of Cash Flows, cash flows from discontinued operations are shown in separate lines in each of the operating, investing and financing sections of the Cash Flow Statement. Our cash flows from continuing operations were sufficient to meet our current liquidity needs for the full-year periods ended December 31, 2017, 2016 and 2015 and we anticipate they will be sufficient to meet our future liquidity needs.

Operating Activities

Net cash flows provided by operating activities totaled $170.1 million, $214.4 million and $190.0 million in 2017, 2016 and 2015, respectively. Our cash flows from operations were sufficient to meet our liquidity needs for 2017, 2016 and 2015.

Investing Activities

Cash in excess of operating requirements is generally invested in fixed maturity securities and equity securities. Fixed maturity securities provide regular interest payments and allow us to match the duration of our liabilities. Equity securities provide dividend income, potential dividend income growth and potential appreciation. For further

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discussion of our investments, including our philosophy and portfolio, see the "Investment Portfolio" section contained in this Item.

In addition to investment income, possible sales of investments and proceeds from calls or maturities of fixed maturity securities also can provide liquidity. During the next five years, $0.8 billion, or 28.1 percent of our fixed maturity portfolio will mature.

We invest funds required for short-term cash needs primarily in money market accounts, which are classified as cash equivalents. At December 31, 2017, our cash and cash equivalents included $16.8 million related to these money market accounts, compared to $16.8 million at December 31, 2016.

Net cash flows used in investing activities totaled $62.0 million, $112.4 million and $36.3 million in 2017, 2016 and 2015, respectively. In 2017, we had cash inflows from scheduled and unscheduled investment maturities, redemptions, prepayments, and sales of investments, from continuing operations, that totaled $205.1 million compared to $328.1 million and $252.2 million for the same period in 2016 and 2015, respectively. In 2017, we had cash inflows from scheduled and unscheduled investment maturities, redemptions, prepayments, and sales of investments, from discontinued operations, that totaled $148.6 million compared to $223.0 million and $422.7 million for the same period in 2016 and 2015, respectively. The cash inflows over the last three years primarily relate to redemptions of fixed maturity securities that are reinvested.

Our cash outflows for investment purchases from continuing operations totaled $267.5 million in 2017, compared to $448.2 million and $360.3 million for the same period in 2016 and 2015, respectively. Our cash outflows for investment purchases from discontinued operations totaled $131.0 million in 2017, compared to $207.7 million and $340.7 million for the same period in 2016 and 2015, respectively.

Financing Activities

Net cash flows used in financing activities from continuing operations totaled $107.5 million, $97.6 million and $137.8 million in 2017, 2016 and 2015, respectively. The change is due to repurchases of common stock, an increase in the payment of cash dividends and a decrease in the issuance of common stock. Net cash flows used in financing activities from discontinued operations totaled $55.3 million, $78.3 million and $133.4 million in 2017, 2016 and 2015, respectively, primarily due to net annuity withdrawals.

Dividends

Dividends paid to shareholders totaled $27.3 million, $24.6 million and $21.7 million in 2017, 2016 and 2015, respectively. Our practice has been to pay quarterly cash dividends, which we have paid every quarter since March 1968.

Payments of any future dividends and the amounts of such dividends, however, will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors out of legally available funds.

As a holding company with no independent operations of its own, United Fire Group, Inc. relies on dividends received from its insurance company subsidiaries in order to pay dividends to its common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31, or net income of the preceding calendar year on a statutory basis, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at December 31, 2017, our insurance company subsidiary, United Fire & Casualty, was able to make a maximum of $35.7 million in dividend payments without prior regulatory approval. These restrictions are not expected to have a material impact in meeting our cash obligations.

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Share Repurchases

Under our share repurchase program, first announced in August 2007, we may purchase our common stock from time to time on the open market or through privately negotiated transactions. The amount and timing of any purchases will be at our discretion and will depend upon a number of factors, including the share price, economic and general market conditions, and corporate and regulatory requirements. Our share repurchase program may be modified or discontinued at any time.

During 2017, 2016 and 2015, pursuant to authorization by our Board of Directors, we repurchased 701,899, 90,415, and 79,396 shares of our common stock, respectively, which used cash totaling $29.8 million in 2017, $3.7 million in 2016 and $2.4 million in 2015. At December 31, 2017, we were authorized to purchase an additional 2,236,572 shares of our common stock under our share repurchase program, which expires in August 2018.

Credit Facilities

Information specific to our credit facilities is incorporated by reference from Note 14 "Credit Facility" contained in Part II, Item 8, "Financial Statements and Supplementary Data."

Stockholders' Equity

Stockholders' equity increased 3.3 percent to $973.4 million at December 31, 2017, from $941.9 million at December 31, 2016. The increase is primarily attributed to full year net income of $51.0 million and an increase in net unrealized investment gains of $44.3 million, net of tax, both offset by, the payment of stockholder dividends of $27.3 million, the change in benefits and the valuation of our post retirement benefit obligations of $16.4 million, and share repurchases of $29.8 million. As of December 31, 2017, the book value per share of our common stock was $39.06, compared to $37.04 at December 31, 2016.

Risk-Based Capital

The NAIC adopted risk-based capital requirements, which requires us to calculate a minimum capital requirement for each of our insurance companies based on individual company insurance risk factors. These "risk-based capital" results are used by state insurance regulators to identify companies that require regulatory attention or the initiation of regulatory action. At December 31, 2017, all of our insurance companies had capital well in excess of required levels.

Contractual Obligations and Commitments

The following table shows our contractual obligations and commitments, including our estimated payments due by period at December 31, 2017:

(In Thousands)	Payments Due By Period
Contractual Obligations	Total		Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years
Future policy benefit reserves (1)	$	2,000,494	$	197,373	$	347,405	$	268,946	$	1,186,770
Loss and loss settlement expense reserves	1,224,183		438,067		409,041		158,571		218,504
Operating leases	22,525		6,435		11,555		3,817		718
Profit-sharing commissions	15,100		15,100		—		—		—
Pension plan contributions	6,400		6,400		—		—		—
Total	$	3,268,702	$	663,375	$	768,001	$	431,334	$	1,405,992

(1) This projection of our obligation for future policy benefits considers only actual future cash outflows. The future policy benefit reserves presented on the Discontinued Operations Balance Sheets in Item 8. Note 17 "Discontinued Operations" is the net present value of the benefits to be paid, less the net present value of future net premiums.

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Future Policy Benefits

The amounts presented for future payments to be made to policyholders and beneficiaries must be actuarially estimated and are not determinable from the contract. The projected payments are based on our current assumptions for mortality, morbidity and policy lapse, but are not discounted with respect to interest. Additionally, the projected payments are based on the assumption that the holders of our annuities and life insurance policies will withdraw their account balances upon the expiration of their contracts. Policies must remain in force for the policyholder or beneficiary to receive the benefit under the policy. Depending on the terms of a particular policy, future premiums from the policyholder may be required for the policy to remain in force. In contrast, our future policy benefit reserves are generally based on historical assumptions for mortality and policy lapse rates and are on a discounted basis. Accordingly, the amounts presented above for future policy benefit reserves significantly exceeds the amount of future policy benefit reserves reported on our Discontinued Operations Balance Sheets at December 31, 2017.

Loss and Loss Settlement Expense Reserves

The amounts presented are estimates of the dollar amounts and time periods in which we expect to pay out our gross loss and loss settlement expense reserves. Because the timing of future payments may vary from the stated contractual obligation, these amounts are estimates based upon historical payment patterns and may not represent actual future payments. Refer to "Critical Accounting Policies: Loss and Loss Settlement Expenses — Property and Casualty Insurance Business" in this section for further discussion.

Operating Leases

Our operating lease obligations are for the rental of office space, vehicles, computer equipment and office equipment. For further discussion of our operating leases, refer to Part II, Item 8, Note 13 "Lease Commitments."

Profit-Sharing Commissions

We offer our agents a profit-sharing plan as an incentive for them to place high-quality property and casualty insurance business with us. Based on business produced by the agencies in 2017, property and casualty agencies will receive profit-sharing payments of $15.1 million in 2018.

Pension Plan Payments

We estimated the pension contribution for 2018 in accordance with the Pension Protection Act of 2006 (the "Act"). Contributions for future years are dependent on a number of factors, including actual performance versus assumptions made at the time of the actuarial valuations and maintaining certain funding levels relative to regulatory requirements. Contributions in 2018, and in future years, are expected to be at least equal to the IRS minimum required contribution in accordance with the Act.

OFF BALANCE SHEET ARRANGEMENTS

Funding Commitments

We hold investments in limited liability partnerships as part of our investment strategy. At December 31, 2017, pursuant to an agreement with two of our limited liability partnership investments, we are contractually committed to make consolidated capital contributions up to $2.2 million upon request of the partnerships through December 31, 2023. These two partnerships are included in our other invested assets on the Consolidated Balance Sheets with a current fair value of $4.3 million, or less than 0.5% of our total invested assets, at December 31, 2017. We recognized investment income of less than $0.1 million from these two investments during 2017.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that are representative of significant judgments and uncertainties and that may potentially result in materially different results under different assumptions and conditions. We base

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our discussion and analysis of our results of operations and financial condition on the amounts reported in our Consolidated Financial Statements, which we have prepared in accordance with GAAP. As we prepare these Consolidated Financial Statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on other assumptions we believe to be reasonable under the circumstances. Actual results could differ from those estimates. We believe our most critical accounting policies are as follows.

Investment Valuation

Upon acquisition, we classify investments in marketable securities as held-to-maturity, available-for-sale, or trading. We record investments in held-to-maturity fixed maturity securities at amortized cost. We record investments in available-for-sale and trading fixed maturity securities and equity securities at fair value. Other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. We record mortgage loans at their unpaid principal balance and policy loans at the outstanding loan amount due from policyholders.

In general, investment securities are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility risk. Therefore, it is reasonably possible that changes in the fair value of our investment securities that are reported at fair value will occur in the near term and such changes could materially affect the amounts reported in the Consolidated Financial Statements. Also, it is reasonably possible that changes in the value of our investments in trading securities and limited liability partnerships could occur in the future and such changes could materially affect our results of operations as reported in our Consolidated Financial Statements.

Fair Value Measurement

Information specific to the fair value measurement of our financial instruments and disclosures is incorporated by reference from Note 3 "Fair Value of Financial Instruments" contained in Part II, Item 8, "Financial Statements and Supplementary Data."

Other-Than-Temporary Impairment Charges ("OTTI")

We continually monitor the difference between our cost basis and the estimated fair value of our investments. Our accounting policy for impairment recognition requires OTTI charges to be recorded when we determine that it is more likely than not that we will be unable to collect all amounts due according to the contractual terms of the fixed maturity security or that the anticipated recovery in fair value of the equity security will not occur in a reasonable amount of time. Impairment charges on investments are recorded based on the fair value of the investments at the measurement date or based on the value calculated using a discounted cash flow model. Factors considered in evaluating whether a decline in value is other-than-temporary include: the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; our intention to hold the investment; and the likelihood that we will be required to sell the investment.

The determination of the amount of impairments varies by investment type and is based upon our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. Additionally, our management considers a wide range of factors about the instrument issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the instrument and in assessing the prospects for recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential.

At December 31, 2017 and 2016, we had a number of securities with fair value less than the cost basis. The total unrealized loss on these securities was $16.9 million at December 31, 2017, compared with $34.8 million at December 31, 2016. At December 31, 2017, the largest pre-tax unrealized loss on an individual equity security was

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$0.2 million. Our rationale for not recording OTTI charges on these securities is discussed in Part II, Item 8, Note 2 "Summary of Investments."

Deferred Policy Acquisition Costs ("DAC") — Continuing Operations - Property and Casualty Insurance

We record an asset for certain costs of underwriting new business, primarily commissions, premium taxes and variable underwriting and policy issue expenses that have been deferred. The amount of underwriting compensation expense eligible for deferral is based on time studies and a ratio of success in policy placement. At December 31, 2017 and 2016, our DAC asset was $88.1 million and $93.4 million, respectively.

The DAC asset is amortized over the life of the policies written, generally one year. We assess the recoverability of DAC on a quarterly basis by line of business. This assessment is performed by comparing recorded unearned premium to the sum of unamortized DAC and estimates of expected losses and loss settlement expenses. If the sum of these costs exceeds the amount of recorded unearned premium (i.e., the line of business is expected to generate an operating loss), the excess is recognized in current period other underwriting expenses as an offset against the established DAC asset. We refer to this offset as a premium deficiency charge.

To calculate the premium deficiency charge by line of business, we estimate an expected loss and loss settlement expense ratio which is based on our best estimate of future losses for each line of business. This calculation is performed on a quarterly basis and developed in conjunction with our quarterly reserving process. The expected loss and loss settlement expense ratios are the only assumptions we utilize in our premium deficiency calculation. Changes in these assumptions can have a significant impact on the amount of premium deficiency charge recognized for a line of business. The premium deficiency calculation is aggregated by line of bussiness in a manner consistent with how the policies are currently being marketed and managed.

The following table illustrates the hypothetical impact on the premium deficiency charge recorded for the quarter ended December 31, 2017, of reasonably likely changes in the assumed loss and loss settlement expense ratios utilized for purposes of this calculation. The entire impact of these changes would be recognized through income as other underwriting expenses. The following table illustrates the impact of potential changes in the expected loss and loss settlement expense ratios for all lines of business on the premium deficiency charge. The base amount indicated below is the actual premium deficiency charge recorded as an offset against the DAC asset established as of the quarter ended December 31, 2017:

Sensitivity Analysis — Impact of Changes in Projected Loss and Loss Settlement Expense Ratios
(In Thousands)	-10%		-5%		Base		+5%		+10%
Premium deficiency charge estimated	$	—	$	—	$	6,123	$	13,862	$	21,996

Actual future results could differ materially from our assumptions used to calculate the recorded DAC asset. Changes in our assumed loss and loss settlement expense ratios in the future would impact the amount of deferred costs in the period such changes in assumptions are made. The premium deficiency charge calculated for the quarter ended December 31, 2017 was $6.1 million compared to the premium deficiency charge of $0.1 million calculated for the same period of 2016.

Deferred Policy Acquisition Costs — Discontinued Operations

Costs that vary with and relate to the successful acquisition of life insurance and annuity business are deferred. Such costs consist principally of commissions, premium taxes, and related variable underwriting, agency and policy issue expenses. The amount of underwriting and other acquisition related compensation and other internal expense eligible for deferral is based on time studies and a ratio of success in policy placement. At December 31, 2017 and 2016, our DAC asset was $71.2 million and $70.8 million, respectively.

We defer and amortize policy acquisition costs on traditional life insurance policies over the premium-paying period in proportion to the ratio of the expected annual premium revenue to the expected total premium revenue. Expected annual premium revenue and gross profits are based on the same mortality and withdrawal assumptions used in

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determining future policy benefits. These assumptions are not revised after policy issuance unless the recorded DAC asset is deemed to be unrecoverable from future expected profits.

We defer policy acquisition costs related to non-traditional business and amortize these costs in proportion to the ratio of the expected annual gross profits to the expected total gross profits. The assumptions used to determine expected gross profits include claims, interest rate spread, mortality experience, and expense margins and policy lapse experience. Of these factors, we anticipate that assumptions for claims, investment returns, expenses and persistency are reasonably likely to have a significant impact on the rate of DAC amortization each year. Changes in the amount or timing of expected gross profits result in adjustments to the cumulative amortization of these costs. The effect on amortization of DAC for revisions to estimated gross profits is reported in earnings in the period the estimated gross profits are revised.

We periodically review estimates of expected profitability and evaluate the need to "unlock" or revise the assumptions for the amortization of the DAC asset related to our non-traditional business. The primary assumptions utilized when estimating future profitability relate to interest rate spread, operating expenses, mortality and policy lapse experience. The table below illustrates the impact that a reasonably likely change in our assumptions used to estimate expected gross profits would have on the DAC asset for our non-traditional business recorded as of December 31, 2017. The entire impact of the changes illustrated would be recognized through income as an increase or decrease to amortization expense:

Sensitivity Analysis — Impact of changes in assumptions on DAC asset (In Thousands)
Changes in assumptions	-10%			+10%
Mortality experience	$	3,169		$	(3,516	)
Policy lapse experience	1,437			(1,371		)
Changes in assumptions	-1%			+1%
Interest rate spread	$	(1,684	)	$	1,613

A material change in these assumptions could have a significant negative or positive effect on our reported DAC asset, earnings and stockholders' equity.

The DAC asset recorded in connection with our non-traditional business is also adjusted with respect to estimated expected gross profits as a result of changes in the net unrealized gains or losses on available-for-sale fixed maturity securities allocated to support the block of deferred annuities and universal life policies. That is, because we carry available-for-sale fixed maturity securities at fair value, we make an adjustment to the DAC asset equal to the change in amortization that would have been recorded if we had sold such securities at their stated fair value and reinvested the proceeds at current yields. We include this adjustment, which is called "shadow" DAC, net of tax, as a component of accumulated other comprehensive income. At December 31, 2017 and 2016, the "shadow" DAC adjustment decreased our DAC asset by $6.3 million and $6.4 million, respectively.

Losses and Loss Settlement Expenses — Continuing Operations

Reserves for losses and loss settlement expenses are reported using our best estimate of ultimate liability for claims that occurred prior to the end of any given reporting period, but have not yet been paid. Before credit for reinsurance recoverables, these reserves were $1,224.2 million and $1,123.9 million at December 31, 2017 and 2016, respectively. We purchase reinsurance to mitigate the impact of large losses and catastrophic events. Loss and loss settlement expense reserves ceded to reinsurers were $59.9 million for 2017 and $59.8 million for 2016. Our reserves, before credit for reinsurance recoverables, by line of business as of December 31, 2017, were as follows:

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(In Thousands)	Case Basis		IBNR		Loss Settlement Expense		Total Reserves
Commercial lines
Fire and allied lines	$	87,659	$	14,385	$	24,637	$	126,681
Other liability	219,195		100,141		177,767		497,103
Automobile	191,898		57,629		62,591		312,118
Workers' compensation	174,076		7,600		29,593		211,269
Fidelity and surety	5,022		2,520		172		7,714
Miscellaneous	312		680		240		1,232
Total commercial lines	$	678,162	$	182,955	$	295,000	$	1,156,117
Personal lines
Automobile	$	12,561	$	911	$	2,138	$	15,610
Fire and allied lines	9,312		1,725		2,566		13,603
Miscellaneous	651		129		271		1,051
Total personal lines	$	22,524	$	2,765	$	4,975	$	30,264
Reinsurance assumed	22,536		15,105		161		37,802
Total	$	723,222	$	200,825	$	300,136	$	1,224,183

Case-Basis Reserves

For each of our lines of business, with respect to reported claims, we establish reserves on a case-by-case basis. Our experienced claims personnel estimate these case-basis reserves using adjusting guidelines established by management. Our goal is to set the case-basis reserves at the ultimate expected loss amount as soon as possible after information about the claim becomes available.

Establishing the case reserve for an individual claim is subjective and complex, requiring us to estimate future payments and values that will be sufficient to settle an individual claim. Setting a reserve for an individual claim is an inherently uncertain process. When we establish and adjust individual claim reserves, we do so based on our knowledge of the circumstances and facts of the claim. Upon notice of a claim, we establish a preliminary (average claim cost) reserve based on the limited claim information initially reported. Subsequently, we conduct an investigation of each reported claim, which allows us to more fully understand the factors contributing to the loss and our potential exposure. This investigation may extend over a long period of time. As our claim investigation progresses, and as our claims personnel identify trends in claims activity, we may refine and adjust our estimates of case reserves. To evaluate and refine our overall reserving process, we track and monitor all claims until they are settled and paid in full, with all salvage and subrogation claims being resolved.

Most of our insurance policies are written on an occurrence basis that provides coverage if a loss occurs during the policy period, even if the insured reports the loss many years later. For example, some liability claims for construction defect coverage are reported 10 years or more after the policy period, and the workers' compensation coverage provided by our policies pays unlimited medical benefits for the duration of the claimant's injury up to the lifetime of the claimant. In addition, final settlement of certain claims can be delayed for years due to litigation or other reasons. Reserves for these claims require us to estimate future costs, including the effect of judicial actions, litigation trends and medical cost inflation, among others. Reserve development can occur over time as conditions and circumstances change many years after the policy was issued and/or the loss occurred.

Our loss reserves include amounts related to both short-tail and long-tail lines of business. "Tail" refers to the time period between the occurrence of a loss and the ultimate settlement of the claim. A short-tail insurance product is one where ultimate losses are known and settled comparatively quickly. Ultimate losses under a long-tail insurance product are sometimes not known and settled for many years. The longer the time span between the incidence of a loss and the settlement of the claim, the more the ultimate settlement amount can vary from the reserves initially established. Accordingly, long-tail insurance products can have significant implications on the reserving process.

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Our short-tail lines of business include fire and allied lines, homeowners, commercial property, auto physical damage and inland marine. The amounts of the case-based reserves that we establish for claims in these lines depend upon various factors, such as individual claim facts (including type of coverage and severity of loss), our historical loss experience and trends in general economic conditions (including changes in replacement costs, medical costs and inflation).

For short-tail lines of business, the estimation of case-basis loss reserves is less complex than for long-tail lines because the claims relate to tangible property. Because of the relatively short time from claim occurrence to settlement, actual losses typically do not vary significantly from reserve estimates.

Our long-tail lines of business include workers' compensation and other liability. In addition, certain product lines such as personal and commercial auto, commercial multi-peril and surety include both long-tail coverages and short-tail coverages. For many long-tail liability claims, significant periods of time, ranging up to several years, may elapse between the occurrence of the loss, the reporting of the loss to us and the settlement of the claim. As a result, loss experience in the more recent accident years for the long-tail liability coverages has limited statistical credibility in our reserving process because a relatively small proportion of losses in these accident years are reported claims and an even smaller proportion are paid losses. In addition, long-tail liability claims are more susceptible to litigation and can be significantly affected by changing contract interpretations and the legal environment. Consequently, the estimation of loss reserves for long-tail coverages is more complex and subject to a higher degree of variability than for short-tail coverages.

The amounts of the case-basis loss reserves that we establish for claims in long-tail lines of business depends upon various factors, including individual claim facts (including type of coverage, severity of loss and underlying policy limits), company historical loss experience, changes in underwriting practice, legislative enactments, judicial decisions, legal developments in the awarding of damages, changes in political attitudes and trends in general economic conditions, including inflation. As with our short-tail lines of business, we review and make changes to long-tail case-based reserves based on our review of continually evolving facts as they become available to us during the claims settlement process. Our adjustments to case-based reserves are reported in the financial statements in the period that new information arises about the claim. Examples of facts that become known that could cause us to change our case-based reserves include, but are not limited to: evidence that loss severity is different than previously assessed; new claimants who have presented claims; and the assessment that no coverage exists.

Incurred But Not Reported ("IBNR") Reserves

On a quarterly basis, the Company's internal actuary performs a detailed analysis of IBNR reserves. This analysis uses various loss projection methods to provide several estimates of ultimate loss (or loss adjustment expense ("LAE")) for each individual year and line of business. The loss projection methods include paid loss development; reported loss development; expected loss emergence based on paid losses; and expected loss emergence based on reported losses. The two methods utilized by our internal actuary to project loss settlement expenses are paid expenses development and development of the ratio of paid expense versus paid loss. Results of the projection methods are compared and a point estimate of ultimate loss (or LAE) is established for each individual year and line of business. The specific projection methods used to establish point estimates vary depending on what is deemed most appropriate for a particular line of business and year. Results of these methods are usually averaged together to provide a final point estimate. Given that there are several inputs depending on the line of business, the methods may be averaged and modified based on changes known to management or trends in the market. IBNR estimates are derived by subtracting reported loss from the final point estimate loss.

Senior management meets with our internal actuary and controller quarterly to review the adequacy of carried IBNR reserves based on results from this actuarial analysis and makes adjustments for changes in business and other factors not completely captured by the data within the actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate. This method of

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establishing our IBNR reserves has consistently resulted in aggregate reserve levels that management believes are reasonable in comparison to the reserve estimates indicated by the actuarial analysis.

For our short-tail lines of business, IBNR reserves constitute a small portion of the overall reserves. These claims are generally reported and settled shortly after the loss occurs. In our long-tail lines of business, IBNR reserves constitute a relatively higher proportion of total reserves, because, for many liability claims, significant periods of time may elapse between the initial occurrence of the loss, the reporting of the loss to us, and the ultimate settlement of the claim.

Loss Settlement Expense Reserves

Loss settlement expense reserves include amounts ultimately allocable to individual claims, as well as amounts required for the general overhead of the claims handling operation that are not specifically allocable to individual claims. We do not establish loss settlement expense reserves on a claim-by-claim basis. Instead, on a quarterly basis, our internal actuary performs a detailed statistical analysis (using historical data) to estimate the required reserve for unpaid loss settlement expenses. On a monthly basis, the required reserve estimate is adjusted to reflect additional earned exposure and expense payments that have occurred subsequent to completion of the quarterly analysis.

LAE is composed of two distinct kinds of expenses which are allocated LAE ("ALAE") and unallocated LAE ("ULAE"). These two expense types have different purposes and characteristics which necessitates different estimation methods in order to provide a valid quarterly estimate of the required reserve for unpaid expense which is generally referred to as an LAE incurred IBNR reserve.

Reserves for unpaid ALAE are estimated quarterly by line of business for each individual accident year using three methods: (1) Paid development, (2) Expected emergence of ALAE, and (3) Development of the ratio of paid ALAE to paid loss. Each of the three methods produces an estimate of the ultimate ALAE cost for an individual accident year and the final estimate is generally a weighted average of the various methods. Inception to date paid ALAE is subtracted from the final ultimate ALAE estimate to provide the estimated ALAE IBNR reserve for each individual accident year.

Reserves for unpaid ULAE are estimated quarterly by line of business for each individual accident year using a single method. This method consists of applying a percentage factor to unpaid loss reserves. The percentage factor used differs by line of business and is evaluated and established on an annual basis using year-end data. The percentage factor is evaluated and selected after reviewing the ratio of paid ULAE to paid loss using calendar year data for the most recent five years.

Generally, the loss settlement expense reserves for long-tail lines of business are a greater portion of the overall reserves, as there are often substantial legal fees and other costs associated with the complex liability claims that are associated with long-tail coverages. Because short-tail lines of business settle much more quickly and the costs are easier to determine, loss settlement expense reserves for such claims constitute a smaller portion of the total reserves.

Reinsurance Reserves

The estimation of assumed and ceded reinsurance loss and loss settlement expense reserves is subject to the same factors as the estimation of loss and loss settlement expense reserves. In addition to those factors, which give rise to inherent uncertainties in establishing loss and loss settlement expense reserves, there exists a delay in our receipt of reported claims for assumed business due to the procedure of having claims first reported through one or more intermediary insurers or reinsurers.

Reserves for assumed reinsurance are established using methods and techniques identical to those used for direct lines of business. The additional delay inherent in assumed reinsurance reporting is considered in our reserving process and payment is not problematic. Assumed reinsurance, like every independent line of business, has unique reporting and payment patterns that are reviewed as part of the reserve estimation process.

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There are three distinct types of reserves ceded to reinsurers: (1) reported claim reserves, (2) loss IBNR, and (3) LAE IBNR. Ceded reserves for reported claims are calculated by subtracting the primary retention from the claim value established by our claim adjuster. Ceded loss IBNR originates solely from our boiler and machinery business which is 100 percent reinsured. For this business ceded loss IBNR is equal to direct loss IBNR. Boiler and machinery business is included in our commercial fire and allied line of business. We will cede some LAE expenses when we cede loss. Our ceded LAE IBNR is estimated based on our ceded unpaid loss reserves and the general relation, by line of business, between LAE and loss. Our primary retention was $2.0 million for 2012 through 2015 and increased to $2.5 million for 2016 through 2017.

Key Assumptions

Our internal and external actuaries and management use a number of key assumptions in establishing an estimate of loss and loss settlement expense reserves, including the following assumptions: future loss settlement expenses can be estimated based on the Company's historical ratios of loss settlement expenses paid to losses; the Company's case-basis reserves reflect the most up-to-date information available about the unique circumstances of each individual claim; no new judicial decisions or regulatory actions will increase our case-basis obligations; historical aggregate claim reporting and payment patterns will continue into the future consistent with the observable past; significant unique and unusual claim events have been identified and appropriate adjustments have been made; and, to the best of our knowledge, there are no new latent trends that would impact our case-basis reserves.

Our key assumptions are subject to change as actual claims occur and as we gain additional information about the variables that underlie our assumptions. Accordingly, management reviews and updates these assumptions periodically to ensure that the assumptions continue to be valid. If necessary, management makes changes not only in the estimates derived from the use of these assumptions, but also in the assumptions themselves. Due to the inherent uncertainty in the loss reserving process, management believes that there is a reasonable chance that modification to key assumptions could individually, or in aggregate, result in reserve levels that are either significantly above or below the actual amount for which the related claims will eventually settle.

As an example, if our loss and loss settlement expense reserves of $1,224.2 million as of December 31, 2017, is 10.0 percent inadequate, we would experience a reduction in future pre-tax earnings of up to $122.4 million. This reduction could be recorded in one year or multiple years, depending on when we identify the deficiency. The deficiency would also affect our financial position in that our equity would be reduced by an amount equivalent to the reduction in net income. Any deficiency that would be recognized in our loss and loss settlement expense reserves usually does not have a material effect on our liquidity because the claims have not been paid. Conversely, if our estimates of ultimate unpaid loss and loss settlement expense reserves prove to be redundant, our future earnings and financial position would be improved. We believe our reserving philosophy, coupled with what we believe to be aggressive and successful claims management and loss settlement practices, has resulted in year-to-year redundancies in reserves. We believe our approach produces recorded reserves that are reasonable as to their relative position within a range of reasonable reserves from year-to-year.

We are unable to reasonably quantify the impact of changes in our key assumptions utilized to establish individual case-basis reserves on our total reported reserves because the impact of these changes would be unique to each specific case-basis reserve established. However, based on historical experience, we believe that aggregate case-basis reserve volatility levels of 5.0 percent and 10.0 percent can be attributed to the ultimate development of our net case-basis reserves. The impact to pre-tax earnings would be a decrease if the reserves were to be adjusted upwards and an increase if the reserves were to be adjusted downwards. The table below details the impact of this development volatility on our reported net case-basis reserves at December 31, 2017:

(In Thousands)
Change in level of net case-basis reserve development	5%		10%
Impact on reported net case-basis reserves	$	33,415	$	66,831

Due to the formula-based nature of our IBNR and loss settlement expense reserve calculations, changes in the key assumptions utilized to generate these reserves can impact our reported results. It is not possible to isolate and

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measure the potential impact of just one of these factors, and future loss trends could be partially impacted by all factors concurrently. Nevertheless, it is meaningful to view the sensitivity of the reserves to potential changes in these variables. To demonstrate the sensitivity of reserves to changes in significant assumptions, the following example is presented. The amounts reflect the pre-tax impact on earnings from a hypothetical percentage change in the calculation of IBNR and loss settlement expense reserves at December 31, 2017. The impact to pre-tax earnings would be a decrease if the reserves were to be adjusted upwards and an increase if the reserves were to be adjusted downwards. We believe that the changes presented are reasonably likely based upon an analysis of our historical IBNR and loss settlement expense reserve experience.

(In Thousands)
Change in claim frequency and claim severity assumptions	5%		10%
Impact due to change in IBNR reserving assumptions	$	10,011	$	20,023

(In Thousands)
Change in LAE paid to losses paid ratio	1%		2%
Impact due to change in LAE reserving assumptions	$	2,958	$	5,916

In 2017, we did not change the key method through which we develop our assumptions on which we based our reserving calculations. In estimating our 2017 loss and loss settlement expense reserves, we did not anticipate future events or conditions that were inconsistent with past development patterns.

Certain of our lines of business are subject to the potential for greater loss and loss settlement expense development than others, which are discussed below:

Other Liability Reserves

Other liability is considered a long-tail line of business, as it can take a relatively long period of time to settle claims from prior accident years. This is partly due to the lag time between the date a loss or event occurs that triggers coverage and the date when the claim is actually reported. Defense costs are also a part of the insured expenses covered by liability policies and can be significant, sometimes greater than the cost of the actual paid claims. For the majority of our products, defense costs are outside of the policy limit, meaning that the amounts paid for defense costs are not subtracted from the available policy limit.

Factors that can cause reserve uncertainty in estimating reserves in this line include: reporting time lags; the number of parties involved in the underlying tort action; whether the "event" triggering coverage is confined to only one time period or is spread over multiple time periods; the potential dollars involved in the individual claim actions; whether such claims were reasonably foreseeable and intended to be covered at the time the contracts were written (i.e., coverage disputes); and the potential for mass claim actions.

Claims with longer reporting time lags may result in greater inherent risk. This is especially true for alleged claims with a latency feature, particularly where courts have ruled that coverage is spread over multiple policy years, hence involving multiple defendants (and their insurers and reinsurers) and multiple policies (thereby increasing the potential dollars involved and the underlying settlement complexity). Claims with long latencies also increase the potential time lag between writing a policy in a certain market and the recognition that such policy has potential mass tort and/or latent claim exposure.

Our reserve for other liability claims at December 31, 2017, was $497.1 million and consisted of 6,351 claims,compared with $513.6 million, consisting of 5,634 claims at December 31, 2016. Of the $497.1 million total reserve for other liability claims,$143.3 millionis identified as defense costs and $33.1 million is identified as general overhead required in the settlement of claims.

Included in the other liability line of business are gross reserves for construction defect losses and loss settlement expenses. Construction defect is a liability allegation relating to defective work performed in the construction of

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structures such as commercial buildings, apartments, condominiums, single family dwellings or other housing, as well as the sale of defective building materials. These claims seek recovery due to damage caused by alleged deficient construction techniques or workmanship. At December 31, 2017, we had $34.4 million in construction defect loss and loss settlement expense reserves, excluding IBNR reserves that are calculated for the overall other liability commercial line, which consisted of 1,857 claims. At December 31, 2016, our reserves, excluding IBNR reserves, totaled $22.3 million, which consisted of 1,382 claims. The reporting of such claims can be delayed, as the statute of limitations can be up to 10 years. Court decisions in recent years have expanded insurers' exposure to construction defect claims. As a result, claims may be reported more than 10 years after a project has been completed, as litigation can proceed for several years before an insurance company is identified as a potential contributor. Claims have also emerged from parties claiming additional insured status on policies issued to other parties, such as contractors seeking coverage from a subcontractor's policy.

In addition to these issues, other variables also contribute to a high degree of uncertainty in establishing reserves for construction defect claims. These variables include: whether coverage exists; when losses occur; the size of each loss; expectations for future interpretive rulings concerning contract provisions; and the extent to which the assertion of these claims will expand geographically. In recent years, we have implemented various underwriting measures that we anticipate will mitigate the amount of construction defect losses experienced. These initiatives include increased care regarding additional insured endorsements; stricter underwriting guidelines on the writing of residential contractors; and an increased utilization of loss control.

Asbestos and Environmental Reserves

Included in the other liability and assumed reinsurance lines of business are reserves for asbestos and other environmental losses and loss settlement expenses. At December 31, 2017 and 2016, we had $2.6 million and $3.7 million, respectively, in direct and assumed asbestos and environmental loss reserves. The estimation of loss reserves for environmental claims and claims related to long-term exposure to asbestos and other substances is one of the most difficult aspects of establishing reserves, especially given the inherent uncertainties surrounding such claims. Although we record our best estimate of loss and loss settlement expense reserves, the ultimate amounts paid upon settlement of such claims may be more or less than the amount of the reserves, because of the significant uncertainties involved and the likelihood that these uncertainties will not be resolved for many years.

Commercial Auto Reserves

Commercial auto claim reserves are established at exposure based on information either known and provided or obtained through the investigation, with some pessimism built in. Incorporated are the perspective and experience the claims staff has acquired, which may include assumptions as to how the claim will develop over time, and with a slightly pessimistic view. Exposures are identified and reserves established within 30 to 60 days depending on the complexity of the case.

Workers' Compensation Reserves

Like the other liability line of business, workers' compensation losses and loss settlement expense reserves are based upon variables that create imprecision in estimating the ultimate reserve. Estimates for workers' compensation are particularly sensitive to assumptions about medical cost inflation, which has been steadily increasing over the past few years. Other variables that we consider and that contribute to the uncertainty in establishing reserves for workers' compensation claims include: state legislative and regulatory environments; trends in jury awards; and mortality rates. Because of these variables, the process of reserving for the ultimate loss and loss settlement expense to be incurred requires the use of informed judgment and is inherently uncertain. Consequently, actual loss and loss settlement expense reserves may deviate from our estimates. Such deviations may be significant. Our reserve for workers' compensation claims at December 31, 2017 was $211.3 million and consisted of 4,844 claims, compared with $205.4 million, consisting of 2,299 claims, at December 31, 2016.

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Reserve Development

The following reserve development section should be read in conjunction with the "Consolidated Results of Operations" section of this Item 7.

In 2017, 2016 and 2015, we recognized a favorable development in our net reserves for prior accident years totaling $54.3 million, $31.2 million and $40.9 million, respectively.

The factors contributing to our year-to-year redundancy include: establishing reserves at their ultimate expected loss amount as soon as practicable after information becomes available, which produces, on average, prudently conservative case reserves; using claims negotiation to control the size of settlements; assuming that we have liability for all claims, even though the issue of liability may, in some cases, be resolved in our favor; promoting claims management services to encourage return-to-work programs; case management by nurses for serious injuries and management of medical provider services and billings; and using programs and services to help prevent fraud and to assist in favorably resolving cases.

Based upon our comparison of carried reserves to actual claims experience over the last several years, we believe that using our Company's historical premium and claims data to establish reserves for losses and loss settlement expenses results in adequate and reasonable reserves. Reserve development is discussed in more detail under the heading "Reserve Development" in the "Consolidated Results of Operations" section in this Item.

The following table details the pre-tax impact on our property and casualty insurance business' financial results and financial condition of reasonably likely reserve development. Our lines of business that have historically been most susceptible to significant volatility in reserve development have been shown separately and utilize hypothetical levels of volatility of 5.0 percent and 10.0 percent. Our other, less volatile, lines of business have been aggregated and utilize hypothetical levels of volatility of 3.0 percent and 5.0 percent.

(In Thousands)
Hypothetical Reserve Development Volatility Levels	-10%			-5%			+5%		+10%
Impact on loss and loss settlement expenses
Other liability	$	(47,892	)	$	(23,946	)	$	23,946	$	47,892
Workers' compensation	(21,056		)	(10,528		)	10,528		21,056
Automobile	(33,737		)	(16,869		)	16,869		33,737
Hypothetical Reserve Development Volatility Levels	-5%			-3%			+3%		+5%
Impact on loss and loss settlement expenses
All other lines	$	(9,866	)	$	(5,920	)	$	5,920	$	9,866

Independent Actuary

We engage an independent actuarial firm to render an opinion as to the reasonableness of the statutory reserves internal management establishes. During 2017 and 2016, we engaged the services of Regnier as our independent actuarial firm for the property and casualty insurance business. We anticipate that this engagement will continue in 2018.

It is management's policy to utilize staff adjusters to develop our estimate of case-basis loss reserves. IBNR and loss settlement expense reserves are established through various formulae that utilize pertinent, recent Company historical data. The calculations are supplemented with knowledge of current trends and events that could result in adjustments to the level of IBNR and loss settlement expense reserves. On a quarterly basis, we compare our estimate of total reserves to the estimates prepared by Regnier by line of business to ensure that our estimates are within the actuary's acceptable range. Regnier performs a review of loss and loss settlement expense reserves at each year end using generally accepted actuarial guidelines to ensure that the recorded reserves appear reasonable. Our net reserves for losses and loss settlement expenses as of December 31, 2017 and 2016 were $1,164.3 million and

70

$1,064.1 million, respectively. In 2017 and 2016, after considering the independent actuary's range of reasonable estimates, management believes that carried reserves were reasonable and therefore did not adjust the recorded amount.

Regnier uses four projection methods in its actuarial analysis of our loss reserves and uses two projection methods in its actuarial analysis of our loss settlement expense reserves. Based on the results of the projection methods, the actuaries select an actuarial point estimate of the reserves, which is compared to our carried reserves to evaluate the reasonableness of the carried reserves. The four methods utilized by Regnier to project losses are: paid loss development; reported loss development; expected loss emergence based on paid losses; and expected loss emergence based on reported losses. The two methods utilized by Regnier to project loss expenses are: paid expenses-to-paid loss and paid expense-to-ultimate loss.

Future Policy Benefits and Losses, Claims and Loss Settlement Expenses — Discontinued Operations

We establish reserves for amounts that are payable under traditional insurance policies, including traditional life products, disability income and income annuities. Reserves are calculated as the present value of future benefits expected to be paid, reduced by the present value of future expected premiums. Our estimates use methods and underlying assumptions that are in accordance with GAAP and applicable actuarial standards. The key assumptions that we utilize in establishing reserves are mortality, morbidity, policy lapse, renewal, retirement, investment returns, inflation and expenses. Future investment return assumptions are determined based upon prevailing investment yields as well as estimated reinvestment yields. Mortality, morbidity and policy lapse assumptions are based on our experience. Expense assumptions include the estimated effects of inflation and expenses to be incurred beyond the premium-paying period. These assumptions are established at the time the policy is issued, are consistent with the assumptions for determining DAC amortization for these contracts, and are generally not changed during the policy coverage period. However, if actual experience emerges in a manner that is significantly adverse relative to the original assumptions, adjustments to reserves (or DAC) may be required resulting in a charge to earnings which could have a material adverse effect on our operating results and financial condition.

For limited pay traditional life products, we periodically determine if any profit occurs at the issuance of a contract that should be deferred over the life of that contract. To the extent that this occurs, we establish an unearned revenue liability at issuance that is amortized over the anticipated life of the contract.

Liabilities for future policy benefits for disability claims are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest.

Other reserves include claims that have been reported but not settled and IBNR reserves for claims on life and disability income insurance. We use our own historical experience and other assumptions such as any known or anticipated developments or trends to establish reserves for these unsettled or unreported claims. The effects of changes in our estimated reserves are included in our results of operations in the period in which the changes occur.

We periodically review the adequacy of traditional life product reserves and recoverability of DAC for these contracts on an aggregate basis using actual experience. In the event that actual experience is significantly adverse compared to the original assumptions, any remaining unamortized DAC asset must be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required. The effects of changes in reserve estimates are reported in the results of operations in the period in which the changes are determined. We have made no changes in our methods in the past three years, other than minor changes in assumptions for new issues in each of the past three years, mostly relating to anticipated mortality rates and investment yields. These assumption changes were made due to corresponding changes in the interest rate environment and the historical mortality of these products. We anticipate that changes in mortality, investment and reinvestment yields, and policy termination assumptions are the factors that would most likely require an adjustment to these reserves or related DAC asset.

Our reserves for universal life and deferred annuity contracts are based upon the policyholders' current account value. Acquisition expenses are amortized in relation to expected gross profits forecasted based upon current best estimates of anticipated premium income, investment earnings, benefits and expenses. Annually, we review our

71

estimates of reserves and the related DAC asset and compare them with actual experience. Differences between actual experience and the assumptions that we used in the pricing of these policies, guarantees and riders, and in the establishment of the related reserves will result in variances in profit for the underlying contract. The effects of the changes in such estimated reserves are included in our results of operations in the period in which the changes occur.

The following table reflects the estimated pre-tax impact to DAC, net of unearned revenue liabilities to our universal life and fixed annuity products that could occur in a twelve-month period because of an unlocking adjustment due to reasonably likely changes in significant assumptions. Changes in assumptions of the same magnitude in the opposite direction would have an impact of a similar magnitude but opposite direction of the examples provided.

Assumption	Determination Methodology	Potential One-Time Effect on DAC Asset, Net of Unearned Revenue Liabilities
Mortality Experience	Based on our mortality experience with consideration given to industry experience and trends	A 10.0% increase in expected mortality experience for all future years would result in a reduction in DAC and an increase in current period amortization expense of $3.2 million.
Surrender Rates	Based on our policy surrender experience with consideration given to industry experience and trends	A 10.0% increase in expected surrender rates for all future years would result in a reduction in DAC and an increase in current period amortization expense of $1.4 million.
Interest Spreads	Based on our expected future investment returns and expected future crediting rates applied to policyholder account balances; future crediting rates include constraints imposed by policy guarantees	A 10-basis-point reduction in future interest rate spreads would result in a reduction in DAC and an increase in current period amortization expense of $1.7 million.
Maintenance Expenses	Based on our experience using an internal expense allocation methodology	A 10.0% increase in future maintenance expenses would result in a reduction in DAC and an increase in current period amortization expense of $0.5 million.

Independent Actuary

We engage an independent actuarial firm to assist us in establishing our future policy benefit reserves for statutory and GAAP reporting and our DAC asset and related amortization for GAAP reporting and to render an opinion as to the reasonableness of the statutory reserves we establish. Statutory reserves are established using prescribed assumptions which are considerably more conservative assumptions regarding future investment earnings and contractual benefit payments than are used for GAAP reserves. During 2017 and 2016, we engaged the services of Griffith, Ballard and Company as our independent actuarial firm for the life insurance business. We anticipate that this engagement will continue in 2018 until the close of the sale of life business to Kuvare.

Pension and Post-retirement Benefit Obligations

The process of estimating our pension and post-retirement benefit obligations and related benefit expense is inherently uncertain, and the actual cost of benefits may vary materially from the estimates recorded. These liabilities are particularly volatile due to their long-term nature and are based on several assumptions. The main assumptions used in the valuation of our benefit obligations are: estimated mortality of the employees and retirees eligible for benefits; estimated expected long-term rates of return on investments; estimated compensation increases; estimated employee turnover; estimated medical expense trend rate; and estimated rate used to discount the ultimate estimated liability to a present value. We engage a consulting actuary from Principal Financial Group, an independent firm, to assist in evaluating and establishing assumptions used in the valuation of our benefit obligations.

A change in any one or more of these assumptions is likely to result in an ultimate liability different from the original actuarial estimate. Such changes in estimates may be material. For example, a 100 basis point decrease in our estimated discount rate would increase the pension and post-retirement benefit obligation at December 31, 2017,

72

by $37.7 million and $10.0 million, respectively, while a 100 basis point increase in the rate would decrease the benefit obligation at December 31, 2017, by $29.5 million and $8.0 million, respectively.

In addition, for the post-retirement benefit plan, a 100 basis point decrease in the medical trend rate would decrease the post-retirement benefit obligation at December 31, 2017, by $7.7 million, while a 100 basis point increase in the medical trend rate would increase the benefit obligation at December 31, 2017, by $9.5 million.

A 100 basis point decrease in our estimated long-term rate of return on pension plan assets would increase the benefit expense for the year ended December 31, 2017, by $1.6 million, while a 100 basis point increase in the rate would decrease benefit expense by $1.6 million, for the same period.

For the post-retirement benefit plan, a 100 basis point increase in our estimated medical trend rate would increase the benefit expense for the year ended December 31, 2017, by $1.1 million, while a 100 basis point decrease in the rate would decrease benefit expense by $0.9 million, for the same period.

Recently Issued Accounting Standards

Information specific to accounting standards that we adopted in 2017 or pending accounting standards that we expect to adopt in the future is incorporated by reference from Note 1 "Summary of Significant Accounting Policies" contained in Part II, Item 8, "Financial Statements and Supplementary Data."

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by this Item 7A is incorporated by reference from Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the headings "Investments" and "Market Risk."

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

United Fire Group, Inc. Consolidated Balance Sheets
	December 31,
(In Thousands, Except Share Data)	2017		2016
Assets
Investments
Fixed maturities
Held-to-maturity, at amortized cost (fair value $150 in 2017 and $150 in 2016)	$	150	$	150
Available-for-sale, at fair value (amortized cost $1,516,610 in 2017 and $1,458,235 in 2016)	1,535,070		1,453,286
Trading securities, at fair value (amortized cost $14,582 in 2017 and $13,054 in 2016)	16,842		14,390
Equity securities
Available-for-sale, at fair value (cost $57,387 in 2017 and $59,994 in 2016)	280,913		246,370
Trading securities, at fair value (cost $5,888 in 2017 and $5,434 in 2016)	6,431		5,644
Other long-term investments	49,352		51,769
Short-term investments	175		175
	1,888,933		1,771,784
Cash and cash equivalents	95,562		89,194
Accrued investment income	13,841		13,617
Premiums receivable (net of allowance for doubtful accounts of $1,255 in 2017 and $1,255 in 2016)	328,513		306,202
Deferred policy acquisition costs	88,102		93,362
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $51,603 in 2017 and $50,925 in 2016)	68,992		55,524
Reinsurance receivables and recoverables	63,194		62,707
Prepaid reinsurance premiums	3,749		3,782
Income taxes receivable	6,031		14,285
Goodwill and net intangible assets	23,971		24,740
Other assets	16,409		13,943
Assets held for sale	1,586,134		1,605,618
Total assets	$	4,183,431	$	4,054,758
Liabilities and stockholders' equity
Liabilities
Losses and loss settlement expenses	$	1,224,183	$	1,123,896
Unearned premiums	465,391		443,802
Accrued expenses and other liabilities	167,396		147,104
Deferred income taxes	5,953		7,849
Liabilities held for sale	1,347,135		1,390,223
Total liabilities	$	3,210,058	$	3,112,874
Stockholders' equity
Common stock, $0.001 par value; authorized 75,000,000 shares; 24,916,806 and 25,429,769 shares issued and outstanding in 2017 and 2016, respectively	$	25	$	25
Additional paid-in capital	196,334		216,482
Retained earnings	608,700		616,322
Accumulated other comprehensive income, net of tax	168,314		109,055
Total stockholders' equity	$	973,373	$	941,884
Total liabilities and stockholders' equity	$	4,183,431	$	4,054,758

The Notes to Consolidated Financial Statements are an integral part of these statements.

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United Fire Group, Inc.

Consolidated Statements of Income and Comprehensive Income

	For the Years Ended December 31,
(In Thousands, Except Share Data)	2017			2016			2015
Revenues
Net premiums earned	$	997,492		$	936,131		$	851,695
Investment income, net of investment expenses	51,190			55,284			46,559
Net realized investment gains (includes reclassifications for net unrealized gains on available-for-sale securities of $6,390 in 2017; $4,520 in 2016; and $4,513 in 2015 previously included in accumulated other comprehensive income)	4,055			4,947			1,124
Other income (loss)	—			—			(107		)
Total revenues	$	1,052,737		$	996,362		$	899,271
Benefits, losses and expenses
Losses and loss settlement expenses	$	725,713		$	652,433		$	520,087
Amortization of deferred policy acquisition costs	207,746			202,892			180,183
Other underwriting expenses (includes reclassifications for employee benefit costs of $5,408 in 2017; $5,486 in 2016; and $7,468 in 2015 previously included in accumulated other comprehensive income)	103,628			83,540			83,631
Total benefits, losses and expenses	$	1,037,087		$	938,865		$	783,901
Income from continuing operations before income taxes	$	15,650		$	57,497		$	115,370
Federal income tax expense (benefit) (includes reclassifications of ($344) in 2017; $338 in 2016; and $1,034 in 2015 previously included in accumulated other comprehensive income)	(29,220		)	8,379			30,050
Net income from continuing operations	$	44,870		$	49,118		$	85,320
Income from discontinued operations, net of taxes	6,153			786			3,806
Net income	$	51,023		49,904			89,126
Other comprehensive income (loss)
Change in net unrealized appreciation on investments	$	72,251		$	13,017		$	(28,185	)
Change in liability for underfunded employee benefit plans	(26,122		)	30,045			8,714
Other comprehensive income (loss), before tax and reclassification adjustments	46,129			43,062			(19,471		)
Income tax effect	(17,540		)	(15,072		)	6,814
Other comprehensive income (loss), after tax, before reclassification adjustments	28,589			27,990			(12,657		)
Reclassification adjustment for net realized gains included in income	(6,390		)	(4,520		)	(4,513		)
Reclassification adjustment for employee benefit costs included in expense	5,408			5,486			7,468
Total reclassification adjustments, before tax	(982		)	966			2,955
Income tax effect	344			(338		)	(1,034		)
Total reclassification adjustments, after tax	(638		)	628			1,921
Comprehensive income	$	78,974		$	78,522		$	78,390
Weighted average common shares outstanding	25,103,720			25,335,706			25,047,405
Earnings per common share from continuing operations:
Basic	$	1.79		$	1.94		$	3.41
Diluted	1.75			1.90			3.38
Earnings per common share:
Basic	$	2.03		$	1.97		$	3.56
Diluted	1.99			1.93			3.53

The Notes to Consolidated Financial Statements are an integral part of these statements.

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United Fire Group, Inc.

Consolidated Statement of Stockholders' Equity

	For the Years Ended December 31,
(In Thousands, Except Share Data)	2017			2016			2015
Common stock
Balance, beginning of year	$	25		$	25		$	25
Shares repurchased (701,899 in 2017; 90,415 in 2016; and 79,396 in 2015)	—			—			—
Shares issued for stock-based awards (198,694 in 2017; 376,142 in 2016; and 202,882 in 2015)	—			—			—
Balance, end of year	$	25		$	25		$	25
Additional paid-in capital
Balance, beginning of year	$	216,482		$	207,426		$	202,676
Compensation expense and related tax benefit for stock-based award grants	4,808			2,880			1,677
Shares repurchased	(29,784		)	(3,746		)	(2,423		)
Shares issued for stock-based awards	4,828			9,922			5,496
Balance, end of year	$	196,334		$	216,482		$	207,426
Retained earnings
Balance, beginning of year	$	616,322		$	591,009		$	523,541
Net income	51,023			49,904			89,126
Accumulated effect of change in enacted tax rate	(31,308		)	—			—
Dividends on common stock ($1.09 per share in 2017; $0.97 per share in 2016; $0.86 per share in 2015)	(27,337		)	(24,591		)	(21,658		)
Balance, end of year	$	608,700		$	616,322		$	591,009
Accumulated other comprehensive income, net of tax
Balance, beginning of year	$	109,055		$	80,437		$	91,173
Change in net unrealized investment appreciation (1)	44,315			5,523			(21,254		)
Change in liability for underfunded employee benefit plans (2)	(16,364		)	23,095			10,518
Accumulated effect of change in tax enacted tax rate	31,308			—			—
Balance, end of year	$	168,314		$	109,055		$	80,437
Summary of changes
Balance, beginning of year	$	941,884		$	878,897		$	817,415
Net income	51,023			49,904			89,126
All other changes in stockholders' equity accounts	(19,534		)	13,083			(27,644		)
Balance, end of year	$	973,373		$	941,884		$	878,897

(1) The change in net unrealized appreciation is net of reclassification adjustments and income taxes.

(2) The change in liability for underfunded employee benefit plans is net of income taxes.

The Notes to Consolidated Financial Statements are an integral part of these statements.

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United Fire Group, Inc.

Consolidated Statements of Cash Flows

	For the Years Ended December 31,
(In Thousands)	2017			2016			2015
Cash Flows From Operating Activities
Net income	$	51,023		$	49,904		$	89,126
Less net income from discontinued operations, net of taxes	6,153			786			3,806
Adjustments to reconcile net income to net cash provided by operating activities
Net accretion of bond premium	8,872			7,049			5,420
Depreciation and amortization	4,574			6,035			6,473
Stock-based compensation expense	4,808			3,696			2,510
Net realized investment gains	(4,055		)	(4,947		)	(1,124		)
Net cash flows from trading investments	(1,909		)	(2,390		)	3,080
Deferred income tax expense (benefit)	(5,921		)	3,331			(5,574		)
Changes in:
Accrued investment income	(224		)	(874		)	(363		)
Premiums receivable	(22,311		)	(29,685		)	(27,487		)
Deferred policy acquisition costs	5,260			(2,815		)	(17,686		)
Reinsurance receivables	(487		)	4,206			12,609
Prepaid reinsurance premiums	33			8			(158		)
Income taxes receivable	8,254			(14,285		)	—
Other assets	(2,465		)	758			(1,097		)
Losses, claims and loss settlement expenses	100,287			120,001			34,458
Unearned premiums	21,589			28,830			36,336
Accrued expenses and other liabilities	(423		)	(7,605		)	16,470
Income taxes payable	—			(5,365		)	66
Deferred income taxes	(25,883		)	1,495			(858		)
Other, net	3,378			(9,943		)	(2,914		)
Cash from operating activities - continuing operations	93,377			97,500			60,161
Cash from operating activities - discontinued operations	31,847			67,766			44,518
Total adjustments	$	125,224		$	165,266		$	104,679
Net cash provided by operating activities	$	170,094		$	214,384		$	189,999
Cash Flows From Investing Activities
Proceeds from sale of available-for-sale investments	$	7,404		$	1,968		$	478
Proceeds from call and maturity of held-to-maturity investments	150			493			105
Proceeds from call and maturity of available-for-sale investments	191,521			323,653			247,692
Proceeds from short-term and other investments	6,032			1,947			3,881
Purchase of held-to-maturity investments	(150		)	(42		)	(450		)
Purchase of available-for-sale investments	(260,957		)	(443,953		)	(355,192		)
Purchase of short-term and other investments	(6,428		)	(4,155		)	(5,103		)
Net purchases and sales of property and equipment	(17,158		)	(7,600		)	(9,696		)
Cash from investing activities - continuing operations	(79,586		)	(127,689		)	(118,285		)
Cash from investing activities - discontinued operations	17,601			15,286			81,999
Net cash used in investing activities	$	(61,985	)	$	(112,403	)	$	(36,286	)
Cash Flows From Financing Activities
Payment of cash dividends	$	(27,337	)	$	(24,591	)	$	(21,658	)
Dividends from discontinued operations	—			—			15,000
Repurchase of common stock	(29,784		)	(3,746		)	(2,423		)
Issuance of common stock	4,828			9,922			5,496
Tax impact from issuance of common stock	—			(816		)	(833		)
Cash from financing activities - continued operations	(52,293		)	(19,231		)	(4,418		)
Cash from financing activities - discontinued operations	(55,256		)	(78,346		)	(133,419		)
Net cash used in financing activities	$	(107,549	)	$	(97,577	)	$	(137,837	)
Net Change in Cash and Cash Equivalents	$	560		$	4,404		$	15,876
Less: decrease (increase) in cash and cash equivalents - discontinued operations	5,808			(4,706		)	6,902
Net increase (decrease) in cash and cash equivalents - continuing operations	6,368			(302		)	22,778
Cash and Cash Equivalents at Beginning of Year - Continuing Operations	89,194			89,496			66,718
Cash and Cash Equivalents at End of Year - Continuing Operations	$	95,562		$	89,194		$	89,496

The Notes to Consolidated Financial Statements are an integral part of these statements.

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Index of Notes to Consolidated Financial Statements	Page
Note 1. Summary of Significant Accounting Policies	79
Note 2. Summary of Investments	87
Note 3. Fair Value of Financial Instruments	98
Note 4. Reinsurance	108
Note 5. Reserves for Losses and Loss Settlement Expenses	111
Note 6. Statutory Reporting, Capital Requirements and Dividends and Retained Earnings Restrictions	126
Note 7. Federal Income Tax	127
Note 8. Employee Benefits	129
Note 9. Stock-Based Compensation	137
Note 10. Segment Information	139
Note 11. Quarterly Supplementary Financial Information (Unaudited)	142
Note 12. Earnings Per Common Share	142
Note 13. Lease Commitments	144
Note 14. Credit Facility	144
Note 15. Intangible Assets	144
Note 16. Accumulated Other Comprehensive Income	145
Note 17. Discontinued Operations	147

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UNITED FIRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, unless otherwise noted)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

United Fire Group, Inc. ("UFG", "United Fire", the "Registrant", the "Company","we", "us", or "our") and its consolidated subsidiaries and affiliates are engaged in the business of writing property and casualty insurance and life insurance and selling annuities through a network of independent agencies. Our insurance company subsidiaries are licensed as a property and casualty insurer in 46 states, plus the District of Columbia, and as a life insurer in 37 states.

Discontinued Operations

We have historically reported our operations in two business segments: property and casualty insurance and life insurance. On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company ("United Life"), to Kuvare US Holdings, Inc. ("Kuvare"). As a result, our life insurance business, previously a separate segment, has been considered held for sale and reported as discontinued operations in the Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income and Consolidated Statements of Cash Flows (collectively, the "Consolidated Financial Statements"). Subsequent to the announcement of this sale, our continuing operations are now reported as one business segment. All current and prior periods reflected in this Form 10-K have been presented as continuing and discontinued operations, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval. For more information, refer to Note 17 "Discontinued Operations."

Principles of Consolidation

The accompanying Consolidated Financial Statements include United Fire and its wholly owned subsidiaries: United Fire & Casualty Company, United Real Estate Holdings Company, LLC, United Life, Addison Insurance Company, Lafayette Insurance Company, United Fire & Indemnity Company, United Fire Lloyds, UFG Specialty Insurance Company, Financial Pacific Insurance Company, Franklin Insurance Company, Mercer Insurance Company, and Mercer Insurance Company of New Jersey, Inc.

United Fire Lloyds, an affiliate of United Fire & Indemnity Company, is organized as a Texas Lloyds plan, which is an aggregation of underwriters who, under a common name, engage in the business of insurance through a corporate attorney-in-fact. United Fire Lloyds is financially and operationally controlled by United Fire & Indemnity Company, its corporate attorney-in-fact, pursuant to three types of agreements: trust agreements between United Fire & Indemnity Company and certain individuals who agree to serve as trustees; articles of agreement among the trustees who agree to act as underwriters to establish how the Lloyds plan will be operated; and powers of attorney from each of the underwriters appointing a corporate attorney-in-fact, who is authorized to operate the Lloyds plan. Because United Fire & Indemnity Company can name the trustees, the Lloyds plan is perpetual, subject only to United Fire & Indemnity Company's desire to terminate it.

United Fire & Indemnity Company provides all of the statutory capital necessary for the formation of the Lloyds plan by contributing capital to each of the trustees. The trust agreements require the trustees to become underwriters of the Lloyds plan, to contribute the capital to the Lloyds plan, to sign the articles of agreement and to appoint the attorney-in-fact. The trust agreements also require the trustees to pay to United Fire & Indemnity Company all of the profits and benefits received by the trustees as underwriters of the Lloyds plan, which means that United Fire & Indemnity Company has the right to receive 100 percent of the gains and profits from the Lloyds plan. The trustees serve at the pleasure of United Fire & Indemnity Company, which may remove a trustee and replace that trustee at any time. Termination of a trustee must be accompanied by the resignation of the trustee as an underwriter, so that the trustee can obtain the capital contribution from the Lloyds plan to reimburse United Fire & Indemnity Company. By retaining the ability to terminate trustees, United Fire & Indemnity Company possesses the ability to name and remove the underwriters.

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United Real Estate Holdings, LLC, formed in 2013, is a wholly owned subsidiary of United Fire & Casualty Company and is organized as an Iowa limited liability corporation, an unincorporated association formed for the purpose of holding United Fire & Casualty Company's ownership in commercial real estate.

In 2015, the Company dissolved three of its holding companies in order to flatten our organizational chart. The companies dissolved were American Indemnity Financial Corporation, Mercer Insurance Group, Inc. and Financial Pacific Insurance Group, Inc. In addition, Texas General Indemnity Company was renamed UFG Specialty Insurance Company on July 1, 2015.

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP"), which differ in some respects from those followed in preparing our statutory reports to insurance regulatory authorities. Our stand-alone subsidiary financial statements submitted to insurance regulatory authorities are presented on the basis of accounting practices prescribed or permitted by the insurance departments of the states in which we are domiciled ("statutory accounting principles").

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; future policy benefits and losses, claims and loss settlement expenses; and pension and post-retirement benefit obligations.

Continuing Operations - Property and Casualty Insurance Business

Premiums written are deferred and recorded as earned premium on a daily pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policies in force. Premiums receivable are presented net of an estimated allowance for doubtful accounts, which is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders.

To establish loss and loss settlement expense reserves, we make estimates and assumptions about the future development of claims. Actual results could differ materially from those estimates, which are subjective, complex and inherently uncertain. When we establish and adjust reserves, we do so given our knowledge at the time of the circumstances and facts of known claims. To the extent that we have overestimated or underestimated our loss and loss settlement expense reserves, we adjust the reserves in the period in which such adjustment is determined.

We record our best estimate of reserves for claim litigation that arises in the ordinary course of business. We consider all of our pending litigation as of December 31, 2017 to be ordinary, routine and incidental to our business.

Discontinued Operations - Life Insurance Business

Our whole life and term insurance (i.e., traditional business) premiums are reported as earned when due and benefits and expenses are associated with premium income in order to result in the recognition of profits over the lives of the related contracts. Premiums receivable are presented net of an estimated allowance for doubtful accounts. Income annuities with life contingencies (single premium immediate annuities and supplementary contracts) have premium recorded and any related expense charge fees recorded as income and expense when the contract is issued. On universal life and deferred annuity policies (i.e., non-traditional business), income and expenses are reported when charged and credited to policyholder account balances in order to result in recognition of profits over the lives of the related contracts. We accomplish this by means of a provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs.

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Liabilities for future policy benefits for traditional products are computed by the net level premium method, using interest assumptions ranging from 3.15 percent to 6.0 percent and withdrawal, mortality and morbidity assumptions appropriate at the time the policies were issued. Liabilities for non-traditional business are stated at policyholder account values before surrender charges. Liabilities for traditional immediate annuities are based primarily upon future anticipated cash flows using assumptions for mortality and interest rates. Liabilities for deferred annuities are carried at the account value.

Reinsurance

Premiums earned and losses and loss settlement expenses incurred are reported net of reinsurance ceded. Ceded insurance business is accounted for on a basis consistent with the original policies issued and the terms of the reinsurance contracts. Refer to Note 4 "Reinsurance" for a discussion of our reinsurance activities.

Investments

Investments in fixed maturities include bonds and redeemable preferred stocks. Our investments in held-to-maturity fixed maturities are recorded at amortized cost. Our investments in available-for-sale fixed maturities and trading securities are recorded at fair value.

Investments in equity securities, which include common and non-redeemable preferred stocks, are classified as available-for-sale or trading and are recorded at fair value.

Changes in unrealized appreciation and depreciation, with respect to available-for-sale fixed maturities and equity securities, are reported as a component of accumulated other comprehensive income, net of applicable deferred income taxes, in stockholders' equity. Changes in unrealized appreciation and depreciation, with respect to trading securities, are reported as a component of income.

Other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. Included in investments at December 31, 2017 and 2016, are securities on deposit with, or available to, various regulatory authorities as required by law, with fair values of $1,492,928 and $1,509,339, respectively.

We review all of our investment holdings for appropriate valuation on an ongoing basis. Refer to Note 2 "Summary of Investments" for a discussion of our accounting policy for impairment recognition.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and non-negotiable certificates of deposit with original maturities of three months or less.

In 2017, 2016, and 2015, we made cash payments for income taxes of $7,667, $24,034 and $39,497, respectively. In addition, we received federal tax refunds of $13,383 and $919 in 2017 and 2015, respectively, that resulted from the utilization of our 2011 net operating losses and net capital losses in the carryforward period. In 2016, we did not receive any federal tax refunds. We made no interest payments in 2017, 2016 and 2015. These payments exclude interest credited to policyholders' accounts.

Deferred Policy Acquisition Costs ("DAC")

Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred. The following table is a summary of the components of DAC that are reported in the accompanying Consolidated Financial Statements.

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Continuing Operations - Property and Casualty Insurance	2017			2016			2015
Recorded asset at beginning of year	$	93,362		$	90,547		$	72,861
Underwriting costs deferred	202,486			205,707			197,869
Amortization of deferred policy acquisition costs	(207,746		)	(202,892		)	(180,183		)
Recorded asset at end of year	$	88,102		$	93,362		$	90,547
Discontinued Operations - Life Insurance
Recorded asset at beginning of year	$	70,750		$	77,717		$	66,858
Underwriting costs deferred	5,463			5,564			6,113
Amortization of deferred policy acquisition costs	(5,181		)	(8,121		)	(6,634		)
	$	71,032		$	75,160		$	66,337
Change in "shadow" deferred policy acquisition costs	119			(4,410		)	11,380
Recorded asset at end of year	$	71,151		$	70,750		$	77,717
Total
Recorded asset at beginning of year	$	164,112		$	168,264		$	139,719
Underwriting costs deferred	207,949			211,271			203,982
Amortization of deferred policy acquisition costs	(212,927		)	(211,013		)	(186,817		)
	$	159,134		$	168,522		$	156,884
Change in "shadow" deferred policy acquisition costs	119			(4,410		)	11,380
Recorded asset at end of year	$	159,253		$	164,112		$	168,264

Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned. This estimate is performed by line of business in a manner consistent with how the policies are currently being marketed and managed.

For traditional life insurance policies, DAC is amortized to income over the premium-paying period in proportion to the ratio of the expected annual premium revenue to the expected total premium revenue. Expected premium revenue and gross profits are based on the same mortality and withdrawal assumptions used in determining future policy benefits. These assumptions are not revised after policy issuance unless the recorded DAC asset is deemed to be unrecoverable from future expected profits.

For non-traditional life insurance policies, DAC is amortized over the anticipated terms in proportion to the ratio of the expected annual gross profits to the total expected gross profits. Changes in the amount or timing of expected gross profits result in adjustments to the cumulative amortization of these costs. The effect on amortization of DAC for revisions to estimated gross profits is reported in earnings in the period the estimated gross profits are revised.

The effect on DAC that results from the assumed realization of unrealized gains (losses) on investments allocated to non-traditional life insurance business is recognized with an offset to net unrealized investment appreciation as of the balance sheet date. The impact of unrealized gains (losses) on available-for-sale securities decreased the DAC asset by $6,294, $6,413 and $2,003 at December 31, 2017, 2016 and 2015, respectively.

Property, Equipment and Depreciation

Property and equipment is presented at cost less accumulated depreciation. The following table is a summary of the components of the property and equipment that are reported in the accompanying Consolidated Financial Statements.

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	2017		2016
Real estate:
Land	$	8,396	$	8,231
Buildings	48,677		41,119
Furniture and fixtures	4,645		4,711
Computer equipment and software	7,274		1,463
Airplane	—		—
Total property and equipment	$	68,992	$	55,524

Expenditures for maintenance and repairs on property and equipment are generally expensed as incurred. We periodically review these assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the underlying asset may not be recoverable. A loss would be recognized if the estimated fair value of the asset were less than its carrying value.

Depreciation is computed primarily by the straight-line method over the following estimated useful lives:

	Useful Life
Computer equipment and software	Three years
Furniture and fixtures	Seven years
Leasehold improvements	Shorter of the lease term or useful life of the asset
Real estate	Seven to thirty-nine years
Airplane	Five years

Depreciation expense totaled $3,805, $5,266 and $5,704 for 2017, 2016 and 2015, respectively.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets arise as a result of business combinations and consist of the excess of the fair value of consideration paid over the tangible assets acquired and liabilities assumed. All of our goodwill and the majority of our intangible assets relate to the acquisition of Mercer Insurance Group on March 28, 2011. We evaluate goodwill and other intangible assets for impairment at least on an annual basis or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount of goodwill and other intangible assets may exceed its implied fair value. Goodwill is evaluated at the reporting unit level. Any impairment is charged to operations in the period that the impairment is identified. In 2016 and 2015, we performed a quantitative impairment assessment of our goodwill and in 2017, we performed a qualitative impairment assessment of our goodwill. As a result of these assessments, we did not recognize an impairment charge on our goodwill in 2017, 2016 or 2015.

Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized by the straight-line method over periods ranging from 2 years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized. In 2016 and 2015, we performed a quantitative impairment assessment of our indefinite-lived intangible assets and, in 2017, we performed a qualitative impairment assessment of our indefinite lived intangible assets. As a result of these assessments, we did not recognize an impairment charge on our intangible assets in 2017, 2016 and 2015. Amortization expense totaled $769 in 2017, 2016 and 2015, respectively.

Income Taxes

Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability,

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except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense.

The Company performs a quarterly review of its tax positions and makes a determination whether it is more likely than not that the tax position will be sustained upon examination. If based on this review, it appears not more likely than not that the position will be sustained, the Company will calculate any unrecognized tax benefits and calculate any interest and penalties. At December 31, 2017, 2016, and 2015 the Company did not recognize any liability for unrecognized tax benefits. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense.

We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2014. The Internal Revenue Service is conducting a routine examination of our income tax return for the 2015 tax year.

Stock-Based Compensation

We currently have two equity compensation plans. One plan allows us to grant restricted and unrestricted stock, stock appreciation rights, incentive stock options, and non-qualified stock options to employees. The other plan allows us to grant restricted and non-qualified stock options to non-employee directors.

We utilize the Black-Scholes option pricing method to establish the fair value of non-qualified stock options granted under our equity compensation plans. Our determination of the fair value of stock options on the date of grant using this option-pricing model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, which include the expected volatility in our stock price, the expected term of the award, the expected dividends to be paid over the term of the award and the expected risk-free interest rate. Any changes in these assumptions may materially affect the estimated fair value of the award. For our restricted and unrestricted stock awards, we utilize the fair value of our common stock on the date of grant to establish the fair value of the award. Refer to Note 9 "Stock-Based Compensation" for further discussion.

Comprehensive Income

Comprehensive income includes all changes in stockholders' equity during a period except those resulting from investments by and dividends to stockholders.

Subsequent Events

In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements.

Recently Issued Accounting Standards

Accounting Standards Adopted in 2017

Share-Based Payments

In March 2016, the Financial Accounting Standards Board ("FASB") issued new guidance on the accounting for share-based payments. The new guidance was issued to simplify the accounting of share-based payments, specifically in the areas of income taxes, classification on the balance sheets as liabilities or equity and classification in the cash flow statement. The new guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those years. The Company adopted the new guidance prospectively as of January 1, 2017. The new guidance resulted in classification changes between the financing and operating section of the Statement of Cash Flow for stock based compensation expense. The adoption also resulted in a tax benefit of $149 and $695 during the three- and twelve-months ended December 31, 2017.

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Income Taxes

In December 2015, the FASB issued guidance on the balance sheet classification of deferred taxes. The new guidance eliminates the requirement to split deferred tax liabilities and assets between current and non-current in a classified balance sheet. The new guidance allows deferred tax liabilities and assets to be included in non-current accounts.The Company adopted the new guidance as of January 1, 2017. The adoption had no impact on the Company's financial position and results of operations since we do not currently report deferred taxes in classified balance sheets.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB finalized the proposed accounting guidance which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the new federal corporate income tax rate. The pronouncement permits the reclassification of other stranded tax effects that relate to the Tax Cuts and Jobs Act (the "Tax Act") but do not directly relate to the change in the federal rate. The guidance is effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption is permitted for reporting periods for which financial statements have not yet been issued or made available for issuance. The Company has early adopted this guidance for the December 31, 2017 Consolidated Financial Statements. The reclassification from Accumulated Other Comprehensive Income to Retained Earnings for the stranded tax effects resulting from the new federal corporate income tax rate was $31.3 million at December 31, 2017.

Pending Adoption of Accounting Standards

Revenue Recognition

In May 2014, the FASB issued comprehensive new guidance on revenue recognition which supersedes nearly all existing revenue recognition guidance under GAAP. The new guidance requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) and all relevant facts and circumstances. Insurance contracts are not within the scope of this new guidance. The new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted the guidance as of January 1, 2018. The Company has completed its review of revenue streams under this new guidance and concluded that the adoption of the new guidance will have no impact on the Company's reporting and disclosure of net premiums earned from insurance contracts, net investment income or net realized gains and losses, as these revenue streams are not within the scope of this new guidance. The remaining revenue streams are immaterial and not impacted by the new standard.

Financial Instruments

In January 2016, the FASB issued guidance updating certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (for example, trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The new guidance also simplifies the impairment process for equity investments without readily determinable fair values. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018. If the new guidance had been adopted as of December 31, 2017, there would be a reclassification from accumulated other comprehensive income to retained earnings of $242.1 million, which is equal to the amount of net unrealized gains and losses on available-for-sale equity securities at December 31, 2017 disclosed in Note 2 "Summary of Investments," of this section. The impact to net realized gains (losses) would equal the change in net unrealized gains and losses on available-for-sale equity securities between December 31, 2017 and December 31, 2016, in the same tables.

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Statement of Cash Flows - Classification of Certain Cash Receipts and Payments

In August 2016, the FASB issued an update that clarifies the classification of certain cash receipts and payments in the Statement of Cash Flows. The update addresses eight existing cash flow issues by clarifying the correct classification to establish uniformity in practice. The updated guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018. The adoption will have no impact on the Company's financial position and results of operations.

Defined Benefit Retirement Plan Cost

In March 2017, the FASB issued guidance on the presentation of net periodic benefit costs of defined benefit retirement benefit plans in the Statements of Income. The new guidance requires the service cost component of net periodic benefit cost of defined benefit plans to be presented in the same line in the Statements of Income as other employee compensation expenses. Also, under the new guidance, the service cost component of the net periodic benefit costs will be the only portion of costs subject to be capitalized in assets. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018 and will update the presentation of net periodic benefit costs in its financial statements beginning with its first quarter Form 10-Q as of March 31, 2018. The adoption will have an immaterial impact on the Company's financial position and results of operations.

Share-Based Payments

In May 2017, the FASB issued new guidance which clarifies and addresses the diversity in practice when there is a change in the terms of a share-based payment award. The updated guidance clarifies when to use modification accounting when there is a change in the terms of a share-based payment and provides three conditions where modification accounting should not be applied. The new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted the new guidance as of January 1, 2018. The adoption will have no impact on the Company's financial position and results of operations.

Leases

In February 2016, the FASB issued guidance on the accounting for leases. The new guidance requires lessees to place a right-of-use asset and a lease liability, for all leases with terms greater than 12 months, on their balance sheets. The lease liability will be based on the present value of the future lease payments and the asset will be based on the liability. Expenses will be recognized on the income statement in a similar manner as previous methods. The new guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those years. The Company will adopt the new guidance as of January 1, 2019. The Company has created an inventory of its operating leases and has calculated the undiscounted future minimum lease payments, which are disclosed in Note 13. Lease Commitments. The undiscounted future minimum lease payments at December 31, 2017 is $22.5 million, which represents less than 1.0 percent of the Company's total assets at December 31, 2017. The Company is reviewing and working on updating it's processes and controls under the new guidance. Management currently believes that the adoption will not have a significant impact on the Company's financial position and results of operations.

Financial Instruments - Credit Losses

In June 2016, the FASB issued new guidance on the measurement of credit losses for most financial instruments. The new guidance replaces the current incurred loss model for recognizing credit losses with an expected loss model for instruments measured at amortized cost and requires allowances to be recorded for available-for-sale debt securities rather than reduce the carrying amount. These allowances will be remeasured each reporting period. The new guidance is effective for annual periods beginning after December 15, 2020 and interim periods within those years. The Company will adopt the new guidance as of January 1, 2021 and is currently evaluating the impact on the Company's financial position, results of operations and key processes.

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Income Taxes - Intra-entity Transfers

In October 2016, the FASB issued new guidance on the income tax treatment of intra-entity transfers. The new guidance replaces the current guidance which prohibits the recognition of current and deferred income taxes of intra-entity transfers until the asset is sold externally. Under the new guidance, the exemption is eliminated and income taxes will be recognized on transfers of intra-entity assets. The new guidance is effective for annual periods beginning after December 15, 2018 and interim periods beginning after December 15, 2019. The Company will adopt the new guidance as of January 1, 2019 and is currently evaluating the impact on the Company's financial position and results of operations.

Goodwill

In January 2017, the FASB issued new guidance which simplifies the test for goodwill impairment. The new guidance eliminates the implied fair value calculation when measuring a goodwill impairment charge. Under the new guidance, impairment charges will be based on the excess of the carrying value over fair value of goodwill. The new guidance is effective for annual and interim periods beginning after December 15, 2019. The Company will adopt the new guidance as of January 1, 2020 and it currently believes the adoption will have no impact on the Company's financial position and results of operations.

NOTE 2. SUMMARY OF INVESTMENTS

Fair Value of Investments

The table that follows is a reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and available-for-sale equity securities, presented on a consolidated basis, including both continuing and discontinued operations as of December 31, 2017 and 2016.

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December 31, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	34		—		—		34
Total Held-to-Maturity Fixed Maturities	$	184	$	—	$	—	$	184
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	17,073	$	4	$	186	$	16,891
U.S. government agency	121,574		1,311		717		122,168
States, municipalities and political subdivisions
General obligations:
Midwest	107,689		2,446		439		109,696
Northeast	47,477		1,174		10		48,641
South	139,870		2,462		813		141,519
West	111,123		2,351		463		113,011
Special revenue:
Midwest	155,475		3,620		351		158,744
Northeast	79,028		1,351		619		79,760
South	260,145		5,218		1,851		263,512
West	156,576		2,929		1,198		158,307
Foreign bonds	51,361		1,441		49		52,753
Public utilities	206,028		3,386		270		209,144
Corporate bonds
Energy	93,191		1,972		110		95,053
Industrials	218,067		3,881		241		221,707
Consumer goods and services	183,253		3,498		494		186,257
Health care	74,125		1,312		29		75,408
Technology, media and telecommunications	146,853		2,376		250		148,979
Financial services	277,824		5,769		442		283,151
Mortgage-backed securities	13,828		101		238		13,691
Collateralized mortgage obligations
Government national mortgage association	157,836		1,921		2,274		157,483
Federal home loan mortgage corporation	201,320		1,879		4,047		199,152
Federal national mortgage association	104,903		1,703		1,174		105,432
Asset-backed securities	4,282		362		8		4,636
Total Available-For-Sale Fixed Maturities	$	2,928,901	$	52,467	$	16,273	$	2,965,095
Equity securities
Common stocks
Public utilities	$	6,394	$	16,075	$	30	$	22,439
Energy	6,514		8,171		120		14,565
Industrials	13,117		53,522		120		66,519
Consumer goods and services	10,110		15,742		164		25,688
Health care	7,763		32,340		—		40,103
Technology, media and telecommunications	6,067		11,556		115		17,508
Financial services	11,529		104,985		67		116,447
Nonredeemable preferred stocks	992		305		—		1,297
Total Available-for-Sale Equity Securities	$	62,486	$	242,696	$	616	$	304,566
Total Available-for-Sale Securities	$	2,991,387	$	295,163	$	16,889	$	3,269,661

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December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	23,216	$	87	$	108	$	23,195
U.S. government agency	76,692		1,445		540		77,597
States, municipalities and political subdivisions
General obligations:
Midwest	143,747		1,808		1,412		144,143
Northeast	57,731		909		231		58,409
South	129,475		1,249		2,355		128,369
West	114,524		1,380		2,173		113,731
Special revenue:
Midwest	167,430		2,313		1,433		168,310
Northeast	70,202		487		2,624		68,065
South	244,225		1,753		6,791		239,187
West	134,287		1,509		4,052		131,744
Foreign bonds	62,995		2,239		—		65,234
Public utilities	212,360		3,761		447		215,674
Corporate bonds
Energy	107,084		2,195		419		108,860
Industrials	225,526		5,359		982		229,903
Consumer goods and services	178,135		3,847		295		181,687
Health care	81,211		2,063		151		83,123
Technology, media and telecommunications	143,402		2,029		819		144,612
Financial services	269,981		5,328		1,358		273,951
Mortgage-backed securities	17,288		201		241		17,248
Collateralized mortgage obligations
Government national mortgage association	145,947		1,279		2,766		144,460
Federal home loan mortgage corporation	176,226		1,638		3,406		174,458
Federal national mortgage association	101,414		1,816		1,334		101,896
Asset-backed securities	4,407		145		282		4,270
Total Available-For-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities
Common stocks
Public utilities	$	6,394	$	13,465	$	188	$	19,671
Energy	6,514		8,555		22		15,047
Industrials	13,252		38,715		173		51,794
Consumer goods and services	10,324		13,851		58		24,117
Health care	7,763		19,657		—		27,420
Technology, media and telecommunications	5,931		9,476		38		15,369
Financial services	17,289		98,728		67		115,950
Nonredeemable preferred stocks	1,037		11		—		1,048
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

89

The following table is a reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and equity securities for continuing and discontinued operations by investment type at December 31, 2017 and 2016.

December 31, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Continuing operations	$	150	$	—	$	—	$	150
Discontinued operations	34		—		—		34
Total Held-to-Maturity Fixed Maturities	$	184	$	—	$	—	184
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,516,610	$	27,412	$	8,952	$	1,535,070
Discontinued operations	1,412,291		25,055		7,321		1,430,025
Total Available-for-Sale Fixed Maturities	$	2,928,901	$	52,467	$	16,273	$	2,965,095
Equity securities:
Continuing operations	$	57,387	$	224,065	$	539	$	280,913
Discontinued operations	5,099		18,631		77		23,653
Total Available-for-Sale Equity Securities	$	62,486	$	242,696	$	616	$	304,566
Total Available-for-Sale Securities	$	2,991,387	$	295,163	$	16,889	$	3,269,661

December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Continuing operations	$	150	$	—	$	—	$	150
Discontinued operations	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,458,235	$	18,725	$	23,674	$	1,453,286
Discontinued operations	1,429,270		26,115		10,545		1,444,840
Total Available-for-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities:
Continuing operations	$	59,994	$	186,692	$	316	$	246,370
Discontinued operations	8,510		15,766		230		24,046
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

90

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at December 31, 2017, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

Maturities - Consolidated:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	97,450	$	97,994	$	2,225	$	2,835
Due after one year through five years	150		150		749,372		763,260		9,055		10,547
Due after five years through 10 years	—		—		823,257		839,360		1,302		1,156
Due after 10 years	—		—		776,653		784,087		2,000		2,304
Asset-backed securities	—		—		4,282		4,636		—		—
Mortgage-backed securities	34		34		13,828		13,691		—		—
Collateralized mortgage obligations	—		—		464,059		462,067		—		—
	$	184	$	184	$	2,928,901	$	2,965,095	$	14,582	$	16,842

Maturities - Continuing Operations:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	37,899	$	38,144	$	2,225	$	2,835
Due after one year through five years	150		150		204,494		208,353		9,055		10,547
Due after five years through 10 years	—		—		394,107		402,799		1,302		1,156
Due after 10 years	—		—		694,850		700,879		2,000		2,304
Asset-backed securities	—		—		3,175		3,535		—		—
Mortgage-backed securities	—		—		9,205		9,231		—		—
Collateralized mortgage obligations	—		—		172,880		172,129		—		—
	$	150	$	150	$	1,516,610	$	1,535,070	$	14,582	$	16,842

Maturities - Discontinued Operations:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	59,551	$	59,850	$	—	$	—
Due after one year through five years	—		—		544,878		554,907		—		—
Due after five years through 10 years	—		—		429,150		436,561		—		—
Due after 10 years	—		—		81,803		83,208		—		—
Asset-backed securities	—		—		1,107		1,101		—		—
Mortgage-backed securities	34		34		4,623		4,460		—		—
Collateralized mortgage obligations	—		—		291,179		289,938		—		—
	$	34	$	34	$	1,412,291	$	1,430,025	$	—	$	—

91

Net Realized Investment Gains and Losses

Net realized gains (losses) on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of net realized investment gains (losses) for 2017, 2016 and 2015, is as follows:

	2017		2016			2015
Net realized investment gains (losses) from continuing operations
Fixed maturities:
Available-for-sale	$	829	$	1,004		$	814
Trading securities
Change in fair value	924		189			(1,352		)
Sales	244		931			1,381
Equity securities:
Available-for-sale	1,553		2,359			1,977
Trading securities
Change in fair value	332		301			(448		)
Sales	57		(6		)	66
Other long-term investments	—		—			(1,314		)
Other-than-temporary-impairment charges:
Fixed maturities	—		—			—
Cash equivalents	—		169			—
Real Estate	116		—			—
Total net realized investment gains from continuing operations	$	4,055	$	4,947		$	1,124
Total net realized investment gains from discontinued operations	4,008		1,156			1,722
Total net realized investment gains	$	8,063	$	6,103		$	2,846

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities from continuing operations for 2017, 2016 and 2015, are as follows:

	2017			2016		2015
Proceeds from sales	$	7,404		$	1,968	$	478
Gross realized gains	1,046			920		451
Gross realized losses	(20		)	—		—

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities from discontinued operations for 2017, 2016 and 2015, are as follows:

	2017			2016			2015
Proceeds from sales	$	7,315		$	12,354		$	11,066
Gross realized gains	1,264			65			683
Gross realized losses	(78		)	(639		)	—

There were no sales of held-to-maturity securities in 2017, 2016 and 2015.

Our investment portfolio includes trading securities with embedded derivatives. These securities are primarily convertible securities which are recorded at fair value. Income or loss, including the change in the fair value of these trading securities, is recognized currently in earnings as a component of net realized investment gains and losses. Our portfolio of trading securities had a fair value of $23,273 and $20,034 at December 31, 2017 and 2016, respectively.

92

Net Investment Income

Net investment income for the years ended December 31, 2017, 2016 and 2015, is comprised of the following:

Years Ended December 31,	2017			2016		2015
Investment income from continuing operations:
Interest on fixed maturities	$	44,784		$	43,147	$	41,859
Dividends on equity securities	7,108			6,448		6,421
Income on other long-term investments
Investment income	6,870			1,200		1,200
Change in value (1)	(2,812		)	10,178		2,313
Interest on short-term investments	120			47		3
Interest on cash and cash equivalents	1,125			352		234
Other	300			422		433
Total investment income from continuing operations	$	57,495		$	61,794	$	52,463
Less investment expenses	6,305			6,510		5,904
Net investment income from continuing operations	$	51,190		$	55,284	$	46,559
Net investment income from discontinued operations	$	49,720		$	51,538	$	54,222
Net investment income	$	100,910		$	106,822	$	100,781

(1) Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.

Funding Commitment

At December 31, 2017, pursuant to an agreement with our limited liability partnership investments, we are contractually committed to make capital contributions up to $2,175 upon request of the partnerships through December 31, 2023.

Unrealized Appreciation and Depreciation

A summary of changes in net unrealized investment appreciation for 2017, 2016 and 2015, is as follows for continuing operations and discontinued operations:

	2017			2016			2015
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	25,573		$	(21,271	)	$	(37,621	)
Available-for-sale equity securities	40,168			34,179			(6,459		)
Deferred policy acquisition costs	119			(4,410		)	11,380
Income tax effect	(21,545		)	(2,975		)	11,446
Accumulated effect of change in enacted tax rate	36,658			—			—
Total change in net unrealized investment appreciation, net of tax	$	80,973		$	5,523		$	(21,254	)

We continually monitor the difference between our cost basis and the estimated fair value of our investments. Our accounting policy for impairment recognition requires other-than-temporary impairment ("OTTI") charges to be recorded when we determine that it is more likely than not that we will be unable to collect all amounts due according to the contractual terms of the fixed maturity security or that the anticipated recovery in fair value of the equity security will not occur in a reasonable amount of time. Impairment charges on investments are recorded based on the fair value of the investments at the measurement date or based on the value calculated using a discounted cash flow model. Credit-related impairments on fixed maturity securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net income. Any non-credit related impairment is recognized as a component of other comprehensive income. Factors considered in evaluating whether a decline in value is other-than-temporary include: the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; our intention to hold the investment; and the likelihood that we will be required to sell the investment.

93

The tables on the following pages summarize our fixed maturity and equity securities that were in an unrealized loss position at December 31, 2017 and 2016 for continuing operations and discontinued operations. The securities are presented by the length of time they have been continuously in an unrealized loss position. It is possible that we could recognize OTTI charges in future periods on securities held at December 31, 2017 if future events or information cause us to determine that a decline in fair value is other-than-temporary.

We have evaluated the near-term prospects of the issuers of our fixed maturity securities in relation to the severity and duration of the unrealized loss and determined that these losses did not warrant the recognition of an OTTI charge in 2017 or 2016. In 2015, we recognized a $1,300 credit loss OTTI on an energy sector fixed maturity security in our Consolidated Statements of Income and Comprehensive Income. This security was in our discontinued operations portfolio. All fixed maturity securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. We believe the unrealized depreciation in value of other securities in our fixed maturity portfolio is primarily attributable to changes in market interest rates and not the credit quality of the issuer. We have no intention to sell and it is more likely than not that we will not be required to sell these securities until the fair value recovers to at least equal to our cost basis or the securities mature.

We have evaluated the near-term prospects of the issuers of our equity securities in relation to the severity and duration of the unrealized loss and, unless otherwise noted, these losses do not warrant the recognition of an OTTI charge at December 31, 2017. There were no OTTI losses on equity securities recognized in 2017, 2016 or 2015. Our largest unrealized loss greater than 12 months on an individual equity security at December 31, 2017, 2016 and 2015 was $158, $188 and $225, respectively. We have no intention to sell any of these securities prior to a recovery in value, but will continue to monitor the fair value reported for these securities as part of our overall process to evaluate investments for OTTI recognition.

94

December 31, 2017	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	5	$	10,370	$	67	2	$	5,765	$	119	$	16,135	$	186
U.S. government agency	11	64,842		390		5	19,372		327		84,214		717
States, municipalities and political subdivisions
General obligations
Midwest	2	2,177		8		3	19,729		431		21,906		439
Northeast	—	—		—		1	3,644		10		3,644		10
South	3	7,959		32		11	29,545		781		37,504		813
West	2	5,944		18		8	25,755		445		31,699		463
Special revenue
Midwest	2	3,486		15		7	19,130		336		22,616		351
Northeast	1	4,471		37		11	28,476		582		32,947		619
South	8	7,749		107		27	69,917		1,744		77,666		1,851
West	3	5,424		16		22	56,753		1,182		62,177		1,198
Foreign bonds	1	857		49		—	—		—		857		49
Public utilities	8	19,186		79		5	8,446		191		27,632		270
Corporate bonds
Energy	1	2,236		13		1	1,606		97		3,842		110
Industrials	10	27,773		146		2	4,275		95		32,048		241
Consumer goods and services	14	32,781		248		3	6,813		246		39,594		494
Health care	4	9,947		29		—	—		—		9,947		29
Technology, media and telecommunications	12	35,319		122		3	10,413		128		45,732		250
Financial services	22	50,144		256		4	11,389		186		61,533		442
Mortgage-backed securities	10	2,458		18		10	6,641		220		9,099		238
Collateralized mortgage obligations
Government national mortgage association	20	49,764		629		17	46,969		1,645		96,733		2,274
Federal home loan mortgage corporation	11	37,543		577		20	75,679		3,470		113,222		4,047
Federal national mortgage association	11	31,958		342		11	20,123		832		52,081		1,174
Asset-backed securities	1	992		8		—	—		—		992		8
Total Available-for-Sale Fixed Maturities	162	$	413,380	$	3,206	173	$	470,440	$	13,067	$	883,820	$	16,273
Equity securities
Common stocks
Public utilities	—	$	—	$	—	1	$	278	$	30	$	278	$	30
Energy	2	528		120		—	—		—		528		120
Industrials	1	99		13		5	193		107		292		120
Consumer goods and services	—	—		—		2	151		164		151		164
Technology, media and telecommunications	2	466		95		1	4		20		470		115
Financial services	2	193		55		1	9		12		202		67
Total Available-for-Sale Equity Securities	7	$	1,286	$	283	10	$	635	$	333	$	1,921	$	616
Total Available-for-Sale Securities	169	$	414,666	$	3,489	183	$	471,075	$	13,400	$	885,741	$	16,889

95

December 31, 2016	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	9	$	10,800	$	108	—	$	—	$	—	$	10,800	$	108
U.S. government agency	10	36,593		540		—	—		—		36,593		540
States, municipalities and political subdivisions
General obligations
Midwest	27	40,545		1,412		—	—		—		40,545		1,412
Northeast	9	9,874		231		—	—		—		9,874		231
South	37	53,699		2,355		—	—		—		53,699		2,355
West	30	55,265		2,173		—	—		—		55,265		2,173
Special revenue
Midwest	41	62,937		1,433		—	—		—		62,937		1,433
Northeast	22	54,993		2,624		—	—		—		54,993		2,624
South	79	152,979		6,791		—	—		—		152,979		6,791
West	44	81,676		4,052		—	—		—		81,676		4,052
Public utilities	20	38,511		423		2	2,122		24		40,633		447
Corporate bonds
Energy	8	15,938		313		3	8,232		106		24,170		419
Industrials	24	42,854		596		3	5,641		386		48,495		982
Consumer goods and services	11	21,059		295		—	—		—		21,059		295
Health care	9	20,918		151		—	—		—		20,918		151
Technology, media and telecommunications	16	41,230		516		3	10,241		303		51,471		819
Financial services	37	75,286		1,358		—	—		—		75,286		1,358
Mortgage-backed securities	16	9,611		187		5	1,198		54		10,809		241
Collateralized mortgage obligations
Government national mortgage association	36	82,430		2,261		9	13,603		505		96,033		2,766
Federal home loan mortgage corporation	41	105,775		3,165		3	5,141		241		110,916		3,406
Federal national mortgage association	27	46,633		1,091		4	4,341		243		50,974		1,334
Asset-backed securities	1	971		29		1	2,559		253		3,530		282
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities
Common stocks
Public utilities	—	$	—	$	—	3	$	120	$	188	$	120	$	188
Energy	—	—		—		1	163		22		163		22
Industrials	—	—		—		6	239		173		239		173
Consumer goods and services	3	282		55		2	15		3		297		58
Technology, media and telecommunications	7	26		5		8	33		33		59		38
Financial services	3	53		3		2	150		64		203		67
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765

96

The following tables are a reconciliation for continuing and discontinued operations of our total fixed maturity and equity securities that were in an unrealized loss position at December 31, 2017 and December 31, 2016. The securities are presented by the length of time they have been continuously in an unrealized loss position:

December 31, 2017	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	88	232,489		1,791		112	302,815		7,161		$	535,304	$	8,952
Discontinued operations	74	180,891		1,415		61	167,625		5,906		348,516		7,321
Total Available-for-Sale Fixed Maturities	162	$	413,380	$	3,206	173	$	470,440	$	13,067	$	883,820	$	16,273
Equity securities:
Continuing operations	5	1,129		236		6	385		303		$	1,514	$	539
Discontinued operations	2	157		47		4	250		30		407		77
Total Available-for-Sale Equity Securities	7	$	1,286	$	283	10	$	635	$	333	$	1,921	$	616
Total Available-for-Sale Securities	169	$	414,666	$	3,489	183	$	471,075	$	13,400	$	885,741	$	16,889

December 31, 2016	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	404	$	654,235	$	23,359	12	$	6,288	$	315	$	660,523	$	23,674
Discontinued operations	150	406,342		8,745		21	46,790		1,800		453,132		10,545
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities:
Continuing operations	12	$	351	$	62	17	$	477	$	254	$	828	$	316
Discontinued operations	1	10		1		5	243		229		253		230
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765

97

NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

• Level 1: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

• Level 2: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

• Level 3: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period.

To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. We obtain one price for each security. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years experience and who have demonstrated knowledge of the subject security. We request and utilize one broker quote per security.

In order to determine the proper classification in the fair value hierarchy for each security where the price is obtained from an independent pricing service, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements.

When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section.

The fair value of our mortgage loans is determined by modeling performed by us based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the loan's fair value, which is a Level 3 fair value measurement.

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The fair value of our policy loans is equivalent to carrying value, which is a reasonable estimate of fair value and is classified as Level 2. We do not make policy loans for amounts in excess of the cash surrender value of the related policy. In all instances, the policy loans are fully collateralized by the related liability for future policy benefits for traditional insurance policies or by the policyholders' account balance for non-traditional policies.

Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers.

For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments.

The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Non-qualified Deferred Compensation Plan and United Fire Group Supplemental Executive Retirement and Deferral Plan (collectively the "Executive Retirement Plans"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plans. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of December 31, 2017, the cash surrender value of the COLI policies was $4,029, which is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policies, and is included in other assets in the Consolidated Balance Sheets.

Policy reserves are developed and recorded for deferred annuities, which is an interest-sensitive product, and income annuities. The fair value of the reserve liability for these annuity products is based upon an estimate of the discounted pretax cash flows that are forecast for the underlying business, which is a Level 3 fair value measurement. We base the discount rate on the current U.S. Treasury spot yield curve, which is then risk-adjusted for nonperformance risk and, for interest-sensitive business and market risk factors. The risk-adjusted discount rate is developed using interest rates that are available in the market and representative of the risks applicable to the underlying business.

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A summary of the carrying value and estimated fair value of our financial instruments from continuing operations at December 31, 2017 and 2016 is as follows:

	December 31, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	150	$	150	$	150	$	150
Available-for-sale securities	1,535,070		1,535,070		1,453,286		1,453,286
Trading securities	16,842		16,842		14,390		14,390
Equity securities:
Available-for-sale securities	280,913		280,913		246,370		246,370
Trading securities	6,431		6,431		5,644		5,644
Other long-term investments	49,352		49,352		51,769		51,769
Short-term investments	175		175		175		175
Cash and cash equivalents	95,562		95,562		89,194		89,194
Corporate-owned life insurance	4,029		4,029		2,592		2,592

A summary of the carrying value and estimated fair value of our financial instruments from discontinued operations at December 31, 2017 and 2016 is as follows:

	December 31, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	34	$	34	$	49	$	48
Available-for-sale securities	1,430,025		1,430,025		1,444,840		1,444,840
Equity securities:
Available-for-sale securities	23,653		23,653		24,046		24,046
Mortgage loans	3,594		3,435		3,895		3,706
Policy loans	5,815		5,815		5,366		5,366
Other long-term investments	16,437		16,437		15,870		15,870
Cash and cash equivalents	15,851		15,851		21,659		21,659
Liabilities
Policy reserves
Annuity (accumulations) (1)	$	591,702	$	611,866	$	646,764	$	666,711
Annuity (benefit payments)	147,038		93,560		144,283		95,129

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The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table include financial instruments from both continuing and discontinued operations at December 31, 2017 and 2016:

			Fair Value Measurements
Description	December 31, 2017		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	16,891	$	—	$	16,891	$	—
U.S. government agency	122,168		—		122,168		—
States, municipalities and political subdivisions
General obligations
Midwest	109,696		—		109,696		—
Northeast	48,641		—		48,641		—
South	141,519		—		141,519		—
West	113,011		—		113,011		—
Special revenue
Midwest	158,744		—		158,744		—
Northeast	79,760		—		79,760		—
South	263,512		—		263,512		—
West	158,307		—		158,307		—
Foreign bonds	52,753		—		52,753		—
Public utilities	209,144		—		209,144		—
Corporate bonds
Energy	95,053		—		95,053		—
Industrials	221,707		—		221,707		—
Consumer goods and services	186,257		—		185,589		668
Health care	75,408		—		75,408		—
Technology, media and telecommunications	148,979		—		148,979		—
Financial services	283,151		—		275,474		7,677
Mortgage-backed securities	13,691		—		13,691		—
Collateralized mortgage obligations
Government national mortgage association	157,483		—		157,483		—
Federal home loan mortgage corporation	199,152		—		199,152		—
Federal national mortgage association	105,432		—		105,432		—
Asset-backed securities	4,636		—		3,989		647
Total Available-For-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities
Common stocks
Public utilities	$	22,439	$	22,439	$	—	$	—
Energy	14,565		14,565		—		—
Industrials	66,519		66,517		2		—
Consumer goods and services	25,688		25,688		—		—
Health care	40,103		40,103		—		—
Technology, media and telecommunications	17,508		17,508		—		—
Financial services	116,447		116,447		—		—
Nonredeemable preferred stocks	1,297		415		—		882
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	2,220	$	—	$	2,220	$	—

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Consumer goods and services	1,535		—		1,535		—
Health care	3,741		—		3,741		—
Technology, media and telecommunications	1,221		—		1,221		—
Financial services	5,566		—		5,566		—
Redeemable preferred stocks	2,559		2,559		—		—
Equity securities
Public utilities	874		874		—		—
Energy	190		190		—		—
Industrials	989		989		—		—
Consumer goods and services	1,314		1,314		—		—
Health care	325		325		—		—
Financial Services	198		198		—		—
Nonredeemable preferred stocks	2,541		2,541		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

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			Fair Value Measurements
Description	December 31, 2016		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	23,195	$	—	$	23,195	$	—
U.S. government agency	77,597		—		77,597		—
States, municipalities and political subdivisions
General obligations
Midwest	144,143		—		144,143		—
Northeast	58,409		—		58,409		—
South	128,369		—		128,369		—
West	113,731		—		113,731		—
Special revenue
Midwest	168,310		—		168,142		168
Northeast	68,065		—		68,065		—
South	239,187		—		239,187		—
West	131,744		—		131,744		—
Foreign bonds	65,234		—		65,234		—
Public utilities	215,674		—		215,674		—
Corporate bonds
Energy	108,860		—		108,860		—
Industrials	229,903		—		229,903		—
Consumer goods and services	181,687		—		180,590		1,097
Health care	83,123		—		83,123		—
Technology, media and telecommunications	144,612		—		144,612		—
Financial services	273,951		—		265,154		8,797
Mortgage-backed securities	17,248		—		17,248		—
Collateralized mortgage obligations
Government national mortgage association	144,460		—		144,460		—
Federal home loan mortgage corporation	174,458		—		174,458		—
Federal national mortgage association	101,896		—		101,896		—
Asset-backed securities	4,270		—		3,821		449
Total Available-For-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities
Common stocks
Public utilities	$	19,671	$	19,671	$	—	$	—
Energy	15,047		15,047		—		—
Industrials	51,794		51,794		—		—
Consumer goods and services	24,117		24,117		—		—
Health care	27,420		27,420		—		—
Technology, media and telecommunications	15,369		15,369		—		—
Financial services	115,950		111,958		—		3,992
Nonredeemable preferred stocks	1,048		453		—		595
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	3,919	$	—	$	3,919	$	—
Consumer goods and services	127		—		127		—
Health care	3,410		—		3,410		—
Technology, media and telecommunications	787		—		787		—

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Financial services	4,842		—		4,842		—
Redeemable preferred stocks	1,305		1,305		—		—
Equity securities
Public utilities	613		613		—		—
Energy	286		286		—		—
Industrials	877		877		—		—
Consumer goods and services	1,202		1,202		—		—
Health care	339		339		—		—
Financial Services	206		206		—		—
Nonredeemable preferred stocks	2,121		2,121		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

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The following tables are a reconciliation for both continuing and discontinued operations of the presentation of the categorization for our financial instruments measured at fair value on a recurring basis at December 31, 2017 and 2016:

December 31, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,535,070	$	—	$	1,534,323	$	747
Discontinued operations	1,430,025		—		1,421,780		8,245
Total Available-for-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities:
Continuing operations	$	280,913	$	280,031	$	—	$	882
Discontinued operations	23,653		23,651		2		—
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities:
Continuing operations	$	16,842	$	2,559	$	14,283	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	6,431		6,431		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	6,147	$	6,147	$	—	$	—
Discontinued operations	10,677		10,677		—		—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	4,029	$	—	$	4,029	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

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December 31, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,453,286	$	—	$	1,452,737	$	549
Discontinued operations	1,444,840		—		1,434,878		9,962
Total Available-for-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities:
Continuing operations	$	246,370	$	243,627	$	—	$	2,743
Discontinued operations	24,046		22,202		—		1,844
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities:
Continuing operations	$	14,390	$	1,305	$	13,085	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	5,644		5,644		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	4,810	$	4,810	$	—	$	—
Discontinued operations	11,992		11,992		—		—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	2,592	$	—	$	2,592	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available.

We use a market-based approach for valuing all of our Level 2 securities and receive them primarily from a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider for pricing. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed

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securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day.

At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. Our validation process includes a review for unusual fluctuations. Unusual fluctuations outside of our expectations are independently corroborated with additional third-party sources that use similar valuation techniques as discussed above. In addition, we also randomly select securities and independently corroborate the valuations obtained from our third-party valuation service providers. In our opinion, the pricing obtained at December 31, 2017 and 2016 was reasonable.

For the year ended December 31, 2017, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities. During the twelve month period ended December 31, 2017, there were no securities transferred between Level 1 and Level 2.

Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers’ valuation processes. If pricing cannot be obtained from these sources, which occurs on a limited basis, management will perform a discounted cash flow analysis, using an appropriate risk-adjusted discount rate, on the underlying security to estimate fair value. During the twelve month period ended December 31, 2017, there were no securities transferred in or out of Level 3.

The following table provides a summary of the changes in fair value of our Level 3 securities, from both continuing and discontinued operations for 2017:

	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities		Equities			Total
Balance at January 1, 2017	$	168		$	9,894		$	449	$	4,587		$	15,098
Unrealized gains (losses) (1)	(8		)	(129		)	198		287			348
Purchases	—			100			—		145			245
Disposals	(160		)	(1,520		)	—		(4,137		)	(5,817		)
Balance at December 31, 2017	$	—		$	8,345		$	647	$	882		$	9,874

(1) Realized gains (losses) are recorded as a component of earnings, whereas unrealized gains (losses) are recorded as a component of comprehensive income.

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The following table provides a summary of the changes in fair value of our Level 3 securities, from both continuing and discontinued operations for 2016:

	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2016	$	343		$	10,895		$	1,036		$	3,978		$	16,252
Realized gains (losses) (1)	—			—			—			—			—
Unrealized gains (losses) (1)	(15		)	134			(39		)	—			80
Purchases	—			—			—			727			727
Disposals	(160		)	(1,135		)	(548		)	(118		)	(1,961		)
Balance at December 31, 2016	$	168		$	9,894		$	449		$	4,587		$	15,098

(1) Realized gains (losses) are recorded as a component of earnings, whereas unrealized gains (losses) are recorded as a component of comprehensive income.

The fixed maturities reported as disposals relate to the receipt of principal on calls or sinking fund bonds, in accordance with the indentures.

NOTE 4. REINSURANCE

Continuing Operations - Property and Casualty Insurance Business

Ceded and Assumed Reinsurance

Reinsurance is a contract by which one insurer, called the reinsurer, agrees to cover, under certain defined circumstances, a portion of the losses incurred by a primary insurer if a claim is made under a policy issued by the primary insurer. Our property and casualty insurance companies follow the industry practice of reinsuring a portion of their exposure by ceding to reinsurers a portion of the premium received and a portion of the risk under the policies written. We purchase reinsurance to reduce the net liability on individual risks to predetermined limits and to protect us against catastrophic losses, such as a hurricane or tornado. We do not engage in any reinsurance transactions classified as finite risk reinsurance.

We account for premiums, written and earned, and losses incurred net of reinsurance ceded. The ceding of insurance does not legally discharge us from primary liability under our policies, and we must pay the loss if the reinsurer fails to meet its obligation. We periodically monitor the financial condition of our reinsurers to confirm that they are financially stable. We believe that all of our reinsurers are in an acceptable financial condition and there were no reinsurance balances at December 31, 2017 for which collection is at risk that would result in a material impact on our Consolidated Financial Statements. The amount of reinsurance recoverable on paid losses totaled $2,859 and $2,447 at December 31, 2017 and 2016, respectively.

We also assume both property and casualty insurance from other insurance or reinsurance companies. Most of the business we have assumed is property insurance, with an emphasis on catastrophe coverage.

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Premiums and losses and loss settlement expenses related to our ceded and assumed business are as follows:

Years Ended December 31,	2017		2016		2015
Ceded Business
Ceded premiums written	$	61,273	$	57,988	$	56,916
Ceded premiums earned	61,305		57,996		56,758
Loss and loss settlement expenses ceded	33,303		13,278		3,868
Assumed Business
Assumed premiums written	$	15,179	$	16,834	$	18,290
Assumed premiums earned	15,059		17,037		18,396
Loss and loss settlement expenses assumed	24,688		9,814		14,415

In 2017, we renewed our participation in all of our assumed programs. Loss and loss settlement expenses ceded increased in 2017 as compared to 2016, primarily due to an increase in severity of commercial auto losses, assumed reinsurance losses and catastrophe losses.

In 2016, we renewed our participation in all of our assumed programs. Loss and loss settlement expenses ceded increased in 2016 as compared to 2015, primarily due to an increase in significant large losses and catastrophe losses.

In 2015, we renewed our participation in all of our assumed programs and added one new program to our portfolio. The new assumed program is for international catastrophes excluding the United States with the largest exposure to European wind perils.

Refer to Note 5 "Reserves for Losses and Loss Settlement Expenses" for an analysis of changes in our overall property and casualty insurance reserves.

Reinsurance Programs and Retentions

We have several programs that provide reinsurance coverage. This reinsurance coverage limits the risk of loss that we retain by reinsuring direct risks in excess of our retention limits. The following table provides a summary of our primary reinsurance programs. Retention amounts reflect the accumulated retentions and co-participation of all layers within a program. For 2017, there was an all lines annual aggregate excess of loss program with variable retention of 7.02 percent of gross net earned premium with a minimum retention of $58.5 million and a maximum of $71.5 million. Our all lines aggregate recovery is also limited to $30.0 million. For 2016, there was an all lines annual aggregate excess of loss program with a variable retention of 7.73 percent of gross net earned premium with a minimum retention of $52.0 million and a maximum of $65.0 million. Our all lines aggregate recovery is also limited to a maximum of $30.0 million. For 2015, there was a $4,000 aggregate annual deductible on our multi-line core program (casualty excess and property excess).

	2017 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,500	$	60,000	100	%	of	$	57,500
Property excess of loss	2,500		25,000		100	%	of	$	22,500
Surety excess of loss	1,500		45,000		100	%	of	$	43,500
Property catastrophe, excess	20,000		250,000		100	%	of	$	230,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

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	2016 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,500	$	40,000	100	%	of	$	37,500
Property excess of loss	2,500		25,000		100	%	of	$	22,500
Surety excess of loss	1,500		36,000		100	%	of	$	34,500
Property catastrophe, excess	20,000		250,000		100	%	of	$	230,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

	2015 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,000	$	40,000	100	%	of	$	38,000
Property excess of loss	2,000		25,000		100	%	of	$	23,000
Surety excess of loss	1,500		36,000		96	%	of	$	34,500
Property catastrophe, excess	20,000		200,000		100	%	of	$	180,000
Property catastrophe, excess	200,000		250,000		90.5	%	of	$	50,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

If we incur catastrophe losses and loss settlement expenses that exceed the coverage limits of our reinsurance program, our property catastrophe program provides one guaranteed reinstatement. In such an instance, we are required to pay the reinsurers a reinstatement premium equal to the full amount of the original premium, which will reinstate the full amount of reinsurance available under the property catastrophe program.

Discontinued Operations - Life Insurance Business

Ceded Reinsurance

United Life purchases reinsurance to limit the dollar amount of any one risk of loss. Our retention on standard individual life cases is $300. Our accidental death benefit rider on an individual policy is reinsured at 100 percent, up to a maximum benefit of $250. Our group coverage, both life and accidental death and dismemberment, is reinsured at 50.0 percent. Catastrophe excess reinsurance coverage applies when three or more insureds die in a catastrophic accident. For catastrophe excess claims, we retain the first $1,000 of ultimate net loss and the reinsurer agrees to indemnify us for the excess up to a maximum of $5,000. We supplement this coverage when appropriate with "known concentration" coverage. Known concentration coverage is typically tied to a specific event and time period, with a threshold of a minimum number of lives involved in the event, minimum event deductible (stated retention limit) and a maximum payout.

Premiums and losses and loss settlement expenses related to our ceded business are as follows:

Years Ended December 31,	2017		2016		2015
Ceded Business
Ceded insurance in-force	$	1,014,794	$	1,023,197	$	1,165,868
Ceded premiums earned	2,722		2,768		3,161
Loss and loss settlement expenses ceded	3,726		3,359		2,113

The ceding of insurance does not legally discharge United Life from primary liability under its policies. United Life must pay the loss if the reinsurer fails to meet its obligations. We periodically monitor the financial condition of our reinsurers to confirm that they are financially stable and have strong credit ratings. We believe that all of our reinsurers are in an acceptable financial condition. Approximately 99 percent of ceded life insurance in force as of December 31, 2017 was ceded to five reinsurers.

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NOTE 5. RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES

Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance primarily covers liability for damage to property of, or injury to, a person or entity other than the insured. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy.

Liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends. Because property and casualty insurance reserves are estimates of the unpaid portions of incurred losses that have been reported to us, as well as losses that have been incurred but not reported, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses and related loss settlement expenses may vary materially from recorded amounts. We regularly update our reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported as a component of losses and loss settlement expenses incurred in the period such changes are determined.

The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will take action that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc. ("Regnier"), to render an opinion as to the reasonableness of our statutory reserves annually. The actuarial opinion is filed in those states where we are licensed.

On a quarterly basis, United Fire's internal actuary performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our internal actuary to review, on a regular and quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate.

Our IBNR methodologies and assumptions are reviewed periodically, but changes are infrequent. Between calendar year 2015 and 2016, in response to an increase in miles driven by commercial vehicles, we revised our commercial automobile frequency and severity assumptions, resulting in an increase to our carried loss IBNR. We also reviewed our methodology and assumptions in our product liability line, associated with our construction defects business, and decreased our frequency and severity assumptions due to improvement in development patterns related to the statute of limitations on accident years that have matured 13 to 15 years which haven't developed to the extent we initially expected. These assumption changes resulted in a release of IBNR in 2016 and 2017 for our product liability line. Besides the changes to our assumptions used for our commercial automobile line and product liability line, we continually review and revise items affecting our projections of required reserves for unpaid loss and loss adjustment expense ("LAE"). Items reviewed and revised include development factors for paid and reported loss, paid development factors for allocated LAE, and the ratios of paid unallocated LAE to paid loss.

We do not discount loss reserves based on the time value of money. 

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The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves for 2017, 2016 and 2015 (net of reinsurance amounts):

Years Ended December 31,	2017			2016			2015
Gross liability for losses and loss settlement expenses at beginning of year	$	1,123,896		$	1,003,895		$	969,437
Ceded losses and loss settlement expenses	(59,794		)	(54,653		)	(63,757		)
Net liability for losses and loss settlement expenses at beginning of year	$	1,064,102		$	949,242		$	905,680
Losses and loss settlement expenses incurred for claims occurring during
Current year	$	779,966		$	683,662		$	560,482
Prior years	(54,253		)	(31,229		)	(40,395		)
Total incurred	$	725,713		$	652,433		$	520,087
Losses and loss settlement expense payments for claims occurring during
Current year	$	311,972		$	277,053		$	225,022
Prior years	313,531			260,520			251,503
Total paid	$	625,503		$	537,573		$	476,525
Net liability for losses and loss settlement expenses at end of year	$	1,164,312		$	1,064,102		$	949,242
Ceded loss and loss settlement expenses	59,871			59,794			54,653
Gross liability for losses and loss settlement expenses at end of year	$	1,224,183		$	1,123,896		$	1,003,895

There are a multitude of factors that can impact loss reserve development. Those factors include, but are not limited to: historical data, the potential impact of various loss reserve development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific dollar impact of any individual factor on the development of reserves.

The significant drivers of the favorable reserve development in 2017 were our commercial liability and workers compensation lines of business. Much of the favorable commercial liability development came from loss adjustment expense and is attributed to our continued litigation management efforts combined with some favorable development coming from decreases in reserves, which were more than sufficient to pay claims as they closed. Workers compensation favorable development was due to the combined effects of decreases in claim reserves along with favorable changes affecting loss adjustment expense. Our personal lines also contributed favorable development. The lines that experienced adverse development during the year, which partially offset the favorable development mentioned earlier, were assumed reinsurance and commercial automobile. The adverse development for assumed reinsurance is due to increases in prior year reserves for unpaid claims while the adverse development for commercial auto is due to paid losses which were greater than reductions in reported loss reserves and reserves for claims incurred but not reported. No other single line of business contributed a significant portion of the total development.

The significant drivers of the favorable reserve development in 2016 were our commercial liability and workers compensation lines of business. Much of the favorable commercial liability development came from loss adjustment expense and is attributed to our continued litigation management efforts. Workers compensation favorable development was due to the combined effects of decreases in claim reserves along with favorable changes affecting loss adjustment expense. Loss adjustment expense, closely tied to loss, generally decreases when loss decreases.

112

Commercial property, commercial automobile and assumed reinsurance lines of business exhibited adverse development which provided a partial offset to the favorable development previously noted. The adverse development for all three lines is due to paid loss which was greater than reductions in reported loss reserves and reserves for claims incurred but not reported. No other single line of business contributed a significant portion of the total development.

The significant drivers of the favorable reserve development in 2015 were our long-tail liability lines, workers compensation, and automobile (physical damage) lines of business. The favorable development is attributable to reductions in reserves for reported claims as well as reductions in required reserves for IBNR claims combined with continued successful management of litigation expenses. These reserve decreases were more than sufficient to offset claim payments. The favorable development was partially offset by adverse development, the majority coming from three lines which included property, assumed reinsurance and commercial auto liability. No other single line of business contributed a significant portion of the total development.

Generally, we base reserves for each claim on the estimated ultimate exposure for that claim. We believe that it is appropriate and reasonable to establish a best estimate for reserves within a range of reasonable estimates, especially when we are reserving for claims for bodily injury, disabilities and similar claims, for which settlements and verdicts can vary widely. Our reserving philosophy may result in favorable reserve development in future years that will decrease losses and loss settlement expenses for prior year claims in the year of adjustment. We realize that this philosophy, coupled with what we believe to be aggressive and successful claims management and loss settlement practices, has resulted in year-to-year redundancies in reserves. We believe our approach produces recorded reserves that are reasonably consistent as to their relative position within a range of reasonable reserves from year-to-year. However, conditions and trends that have affected the reserve development for a given year do change. Therefore, such development cannot be used to project future reserve redundancies or deficiencies.

We are not aware of any significant contingent liabilities related to environmental issues. Because of the type of property coverage we write, we have potential exposure to environmental pollution, mold and asbestos claims. Our underwriters are aware of these exposures and use riders or endorsements to limit exposure.

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The following tables provide information about incurred and paid losses and loss settlement expense development as of December 31, 2017, net of reinsurance, as well as cumulative development, cumulative claim frequency and IBNR liabilities. Claim data for Mercer Insurance Group, which was acquired on March 28, 2011, is presented retrospectively.

The cumulative number of reported claims, for calendar year 2017 and 2016, are counted for all lines of business on a per claimant per coverage basis and a single event may result in multiple claims due to the involvement of multiple individual claimants and / or multiple independent coverages. Claim counts for calendar years 2015 and prior are counted on a per claim and per coverage basis. Claim counts include open claims, claims that have been paid and closed, and reported claims that have been closed without the need for any payment.

Line of business: Commercial other liability
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	79,455	$	84,944	$	81,963	$	73,892	$	63,231	$	78,152	$	75,178	$	74,115	$	74,915	$	75,364	$	12,636	(4,091	)	6,734
2009			88,298		85,991		73,545		65,831		84,286		83,660		85,761		86,757		86,543		11,268		(1,755	)	6,123
2010					88,987		69,533		65,299		82,865		78,564		77,948		78,291		78,498		14,468		(10,489	)	5,174
2011							81,522		64,738		88,371		88,200		79,591		80,801		81,463		15,016		(59	)	5,328
2012									100,389		96,158		94,195		91,980		92,537		91,346		18,407		(9,043	)	5,540
2013											104,982		91,460		90,502		86,119		85,399		9,697		(19,583	)	6,007
2014													118,928		117,958		106,486		97,809		13,583		(21,119	)	6,109
2015															137,386		125,307		120,005		25,634		(17,381	)	7,083
2016																	139,144		130,041		35,760		(9,103	)	7,512
2017																			139,602		68,465				5,833
																	Total		$	986,070

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Line of business: Commercial other liability
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	9,220	$	24,096	$	34,482	$	42,545	$	47,112	$	50,143	$	52,659	$	55,843	$	59,052	$	60,698
2009			8,375		21,151		32,073		41,696		50,098		56,789		63,149		67,733		70,814
2010					7,103		15,230		24,577		35,043		51,336		56,761		60,116		62,070
2011							6,236		13,670		26,260		40,595		50,146		56,150		62,165
2012									6,875		24,620		39,948		55,316		64,574		69,800
2013											9,835		25,228		39,953		54,559		65,773
2014													10,207		29,679		50,211		70,363
2015															11,185		27,182		53,901
2016																	13,782		38,184
2017																			17,716
																	Total		$	571,484
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														29,167
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	443,753

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Line of business: Commercial fire and allied
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	157,303	$	141,384	$	138,602	$	140,321	$	134,821	$	116,940	$	118,115	$	118,376	$	118,329	$	118,308	$	44	(38,995	)	21,101
2009			113,754		106,085		105,031		105,614		87,751		87,845		87,932		88,891		89,027		154		(24,727	)	18,038
2010					113,139		106,152		108,246		83,836		83,932		83,767		83,981		84,213		229		(28,926	)	16,671
2011							148,220		142,330		117,082		120,492		119,820		120,219		121,434		611		(26,786	)	16,026
2012									138,602		110,448		108,774		108,047		107,958		108,623		970		(29,979	)	6,408
2013											91,521		88,550		91,498		92,212		93,826		1,139		2,305		6,598
2014													126,216		131,198		128,762		128,185		1,397		1,969		7,827
2015															103,177		108,293		110,633		3,370		7,456		7,465
2016																	147,473		144,208		3,597		(3,265	)	9,496
2017																			155,139		16,178				11,574
																	Total		$	1,153,596

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Line of business: Commercial fire and allied
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	80,005	$	102,804	$	107,480	$	112,678	$	115,804	$	115,897	$	117,553	$	117,690	$	118,003	$	118,059
2009			53,219		72,181		77,732		82,809		86,930		87,544		87,721		88,037		88,159
2010					52,660		72,271		78,284		80,352		82,037		83,000		83,374		83,915
2011							85,585		104,800		109,429		112,497		116,614		118,183		120,178
2012									71,008		94,380		100,078		103,197		105,250		106,521
2013											59,331		78,226		82,853		86,115		89,200
2014													84,456		113,663		116,750		122,370
2015															67,217		90,454		95,515
2016																	92,895		125,962
2017																			99,484
																	Total		$	1,049,363
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														573
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	104,806

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Line of business: Commercial automobile
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	80,461	$	78,391	$	76,051	$	76,527	$	75,070	$	75,021	$	73,506	$	73,431	$	73,463	$	73,487	$	12	(6,974	)	18,114
2009			80,021		69,328		68,569		64,121		64,516		63,605		63,560		63,567		63,509		—		(16,512	)	15,019
2010					75,781		68,068		65,860		67,015		67,563		67,296		68,086		67,910		17		(7,871	)	16,245
2011							84,887		87,299		90,750		92,519		92,379		91,336		90,766		311		5,879		15,246
2012									100,039		90,848		94,755		95,321		96,594		96,389		488		(3,650	)	14,353
2013											104,356		98,037		102,943		103,726		104,980		1,310		624		15,504
2014													107,723		106,076		113,720		118,869		3,634		11,146		17,222
2015															125,506		129,816		132,206		7,874		6,700		19,875
2016																	174,018		175,357		21,439		1,339		26,662
2017																			227,919		58,850				28,858
																	Total		$	1,151,392

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Line of business: Commercial automobile
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	30,527	$	47,271	$	58,926	$	68,629	$	70,459	$	72,122	$	72,984	$	72,990	$	73,018	$	73,394
2009			27,674		44,867		53,451		58,087		61,398		62,732		63,495		63,503		63,508
2010					29,329		41,141		52,953		57,947		62,231		65,169		67,622		67,852
2011							34,332		50,931		65,021		79,383		85,348		87,475		88,609
2012									39,247		57,201		71,469		82,944		90,292		93,179
2013											43,592		67,630		79,663		90,780		96,375
2014													45,704		68,033		87,590		99,922
2015															50,782		78,225		99,201
2016																	66,013		103,528
2017																			81,311
																	Total		$	866,879
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														39
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	284,552

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Line of business: Workers' compensation
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	42,739	$	42,301	$	39,895	$	41,278	$	40,474	$	40,010	$	39,386	$	39,680	$	39,768	$	38,664	$	499	(4,075	)	5,057
2009			43,560		39,009		36,294		36,837		36,823		36,158		36,014		35,026		35,012		489		(8,548	)	4,264
2010					38,210		42,531		41,180		41,167		40,647		41,422		41,468		42,617		596		4,407		3,978
2011							39,967		38,481		35,352		34,309		33,585		33,314		33,352		747		(6,615	)	3,930
2012									48,848		46,279		42,158		38,423		38,553		39,015		754		(9,833	)	3,813
2013											64,048		62,579		56,369		54,584		52,761		975		(11,287	)	4,173
2014													64,051		60,729		58,284		56,630		1,409		(7,421	)	4,593
2015															53,788		55,578		51,003		1,753		(2,785	)	5,311
2016																	70,419		66,575		3,392		(3,844	)	6,732
2017																			76,184		7,317				5,460
																	Total		$	491,813

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Line of business: Workers' compensation
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	10,082	$	21,227	$	25,736	$	30,123	$	31,980	$	33,770	$	34,319	$	34,862	$	35,292	$	36,010
2009			10,478		20,292		24,189		27,747		29,898		31,003		31,886		32,911		33,117
2010					11,821		22,606		28,765		31,887		33,119		34,143		35,052		38,973
2011							10,322		21,678		26,033		27,497		28,247		29,022		29,453
2012									11,802		23,023		28,397		30,933		33,063		34,330
2013											14,136		30,209		38,023		42,941		45,078
2014													13,965		30,289		38,441		42,964
2015															12,063		27,304		35,229
2016																	14,413		32,345
2017																			14,647
																	Total		$	342,146
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														18,973
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	168,640

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Line of business: Personal
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	49,961	$	44,686	$	43,408	$	43,672	$	43,577	$	43,535	$	43,515	$	43,482	$	42,882	$	42,881	$	—	(7,080	)	15,821
2009			34,597		33,519		31,945		32,026		32,134		32,029		32,085		32,070		31,867		2		(2,730	)	13,502
2010					36,686		34,347		33,928		33,865		33,403		33,413		33,432		33,213		29		(3,473	)	13,325
2011							50,014		48,534		47,090		47,035		46,968		47,013		46,733		74		(3,281	)	14,843
2012									47,924		46,199		46,403		46,150		44,715		44,352		108		(3,572	)	10,769
2013											39,232		38,525		37,262		37,086		36,729		172		(2,503	)	9,232
2014													53,910		52,661		52,944		52,782		236		(1,128	)	10,899
2015															42,848		41,088		40,336		396		(2,512	)	9,490
2016																	48,072		45,840		733		(2,232	)	11,674
2017																			60,330		3,310				13,049
																	Total		$	435,063

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Line of business: Personal
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	32,032	$	40,114	$	41,735	$	42,414	$	42,613	$	42,627	$	42,748	$	42,748	$	42,787	$	42,881
2009			22,086		27,926		29,801		30,829		31,564		31,644		31,718		31,804		31,837
2010					24,499		29,867		31,340		32,076		32,771		32,997		33,165		33,158
2011							36,489		43,801		45,306		45,949		46,487		46,573		46,575
2012									30,415		41,979		43,375		44,448		43,569		44,139
2013											25,505		32,788		34,297		35,306		36,155
2014													37,055		47,912		49,710		51,837
2015															29,551		37,431		39,027
2016																	32,999		40,910
2017																			42,135
																	Total		$	408,654
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														1,326
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	27,735

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The reconciliation of the net incurred and loss development tables to the liability for unpaid losses and loss settlement expenses in the consolidated statement of financial position is as follows.

	December 31, 2017
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses:
Commercial other liability	$	443,753
Commercial fire and allied	104,806
Commercial automobile	284,552
Commercial workers' compensation	168,640
Personal	27,735
All other lines	43,709
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	1,073,195
Net outstanding liabilities for unpaid unallocated loss settlement expenses	88,193
Fair value adjustment (purchase accounting adjustment for Mercer acquisition)	2,924
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	1,164,312
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses:
Commercial other liability	20,367
Commercial fire and allied	10,806
Commercial automobile	1,994
Commercial workers' compensation	26,799
Personal	26
All other lines	2,675
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	62,667
Reinsurance fair value amortization (purchase accounting adjustment for Mercer acquisition)	(2,796		)
Total reinsurance recoverable on unpaid losses and loss settlement expenses	59,871
Total gross liability for unpaid losses and loss settlement expenses	$	1,224,183

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The following is supplementary information about average historical claims duration as of December 31, 2017.

	Average annual percentage payout of incurred claims by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	(Unaudited)
Commercial other liability	10.1	%	15.9	%	16.4	%	15.3	%	11.9	%	6.4	%	5.6	%	4.0	%	3.9	%	2.2	%
Commercial fire and allied	64.4	%	20.9	%	4.8	%	3.7	%	3.0	%	0.9	%	0.9	%	0.4	%	0.2	%	—	%
Commercial automobile	39.9	%	20.9	%	15.1	%	10.9	%	5.6	%	2.8	%	1.8	%	0.1	%	—	%	0.5	%
Commercial workers' compensation	26.1	%	29.0	%	13.6	%	8.1	%	4.3	%	3.2	%	1.8	%	4.5	%	0.8	%	1.9	%
Personal	71.9	%	19.1	%	4.0	%	2.5	%	1.1	%	0.5	%	0.3	%	0.1	%	0.1	%	0.2	%

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NOTE 6. STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS

Statutory capital and surplus in regards to policyholders at December 31, 2017, 2016 and 2015 and statutory net income (loss) for the years then ended are as follows:

	Statutory Capital and Surplus		Statutory Net Income (Loss)
2017
Property and casualty business	$	757,443	$	19,687
Life, accident and health business	144,533		5,485
2016
Property and casualty business	$	770,908	$	39,087
Life, accident and health business	139,806		(3,177		)
2015
Property and casualty business	$	722,404	$	75,554
Life, accident and health business	138,855		(1,524		)

(1) Because United Fire & Casualty Company owns United Life Insurance Company, the property and casualty statutory capital and surplus includes life, accident and health statutory capital and surplus, and therefore represents our total consolidated statutory capital and surplus.

State insurance holding company laws and regulations generally require approval from the insurer's domicile state insurance Commissioner for any material transaction or extraordinary dividend. For property and casualty insurers, a material transaction is defined as any sale, loan, exchange, transfer or guarantee with an affiliate where the aggregate value of the transaction exceeds 25 percent of the insurer's policyholders' surplus or three percent of its admitted assets (measured at December 31 of the preceding year), whichever is less. For life insurers, a material transaction with an affiliate is defined as a transaction with an aggregate value exceeding three percent of the life insurer's admitted assets (measured at December 31 of the preceding year).

State laws and regulations generally limit the amount of funds that an insurance company may distribute to a parent as a dividend without Commissioner approval. As a holding company with no independent operations of its own, United Fire Group, Inc. relies on dividends received from its insurance company subsidiaries in order to pay dividends to its common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31, or net income of the preceding calendar year on a statutory basis, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at December 31, 2017, our insurance company subsidiary, United Fire & Casualty Company, is able to make a maximum of $35,744 in dividend payments without prior approval. At December 31, 2017, we were in compliance with applicable state laws and regulations. These restrictions will not have a material impact in meeting our cash obligations. In addition, United Fire Group, Inc. maintains a credit agreement, as discussed in Part II, Note 14 "Credit Facility," which permits us to borrow up to an aggregate principal amount of $50,000 and allows the Company to increase the aggregate amount of the commitments thereunder by up to $100,000.

We paid dividends to our common shareholders of $27,337, $24,591 and $21,658 in 2017, 2016 and 2015, respectively. Payments of any future dividends and the amounts of such dividends, however, will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors, out of funds legally available, and subject to any other restrictions that may be applicable to us.

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In 2017, 2016 and 2015, United Fire & Casualty Company received dividends from its wholly owned subsidiaries of $13,300, $26,000 and $16,500, respectively. In 2017, 2016 and 2015, United Fire & Casualty Company paid dividends to United Fire Group, Inc. totaling $40,000, $24,000 and $22,500, respectively. These intercompany dividend payments are eliminated for reporting in our Consolidated Financial Statements.

A majority of our custodial assets are subject to a tri-party agreement between one of our subsidiary companies, United Life, the custodian, and the Iowa Insurance Commissioner. Under this agreement, as long as United Life maintains the minimum aggregate value of securities in the account (based on its legal reserve requirements), it is free to invest, withdraw or loan these funds or pay dividends using these funds without approval from the Commissioner. Investment of these funds is subject to the same limitations on asset class and credit quality imposed by the Commissioner on all insurance company invested assets. Investment income derived from these custodied funds is available for general corporate purposes and to satisfy corporate obligations without approval from the Commissioner.

At December 31, 2017, United Life had net admitted assets, on a statutory basis, of $1,497,955, $215,488 in excess of its legal reserve requirement. Therefore, any restriction on funds deposited by United Life with the Iowa Insurance Commissioner would not materially affect its financial position or results of operations and its cash flows are sufficient to meet its operational requirements. Under the material transaction and dividend standards described above, United Life currently is not able to enter into an affiliate transaction and/or pay a dividend without approval from the Commissioner.

Our property and casualty and life insurance subsidiaries are required to prepare and file statutory-basis financial statements in conformity with the National Association of Insurance Commissioners ("NAIC") Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner and/or director. The accounting principles used to prepare these statutory-basis financial statements follow prescribed or permitted accounting practices that differ from GAAP. Prescribed statutory accounting principles include state laws, regulations and general administrative rules issued by the state of domicile, as well as a variety of publications and manuals of the NAIC. Permitted accounting practices encompass all accounting practices not prescribed, but allowed by the state of domicile. No material permitted accounting practices were used to prepare our statutory-basis financial statements during 2017, 2016 and 2015. Statutory accounting principles primarily differ from GAAP in that policy acquisition and certain sales inducement costs are charged to expense as incurred, goodwill is amortized, life insurance reserves are established based on different actuarial assumptions and the values reported for investments, pension obligations and deferred taxes are established on a different basis.

We are directed by the state insurance departments' solvency regulations to calculate a required minimum level of statutory capital and surplus based on insurance risk factors. The risk-based capital results are used by the NAIC and state insurance departments to identify companies that merit regulatory attention or the initiation of regulatory action. Both United Life and United Fire & Casualty Company and its property and casualty insurance subsidiaries and affiliates had statutory capital and surplus in regards to policyholders well in excess of their required levels at December 31, 2017.

NOTE 7. FEDERAL INCOME TAX

The Tax Act was enacted on December 22, 2017. The Tax Act significantly revised the U.S. corporate income tax laws including lowering the U.S. federal corporate tax rate from 35 percent to 21 percent, effective January 1, 2018.

In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of December 31, 2017 we had not completed accounting for the tax effects of enactment of the Tax Act, however for certain items, we have made a reasonable estimate of the effects on our deferred tax balances. For other items where we could not make a reasonable estimate, we are still using existing accounting guidance and the provisions of the tax laws that were in

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place prior to the enactment. For the items were we were able to determine a reasonable estimate, we recognized a provisional amount in income tax expense from continuing operations of $21,884. The Company will continue to refine this estimated provisional adjustment as we gain a more through understanding of the tax law and the Company will take future guidance into consideration when it becomes available.

Federal income tax expense (benefit) from both continuing and discontinued operations is composed of the following:

Years Ended December 31,	2017			2016		2015
Current	$	1,989		$	3,239	$	37,649
Deferred	(26,719		)	5,524		(5,324		)
Total	$	(24,730	)	$	8,763	$	32,325

A reconciliation of income tax expense (benefit) computed at the applicable federal tax rate of 35.0 percent to the amount recorded in the accompanying Consolidated Statements of Income and Comprehensive Income is as follows:

Years Ended December 31,	2017			2016			2015
Computed expected income tax expense	$	9,202		$	20,533		$	42,508
Impact of enactment of Tax Act	(21,884		)	—			—
Tax-exempt municipal bond interest income	(8,875		)	(8,330		)	(7,669		)
Nontaxable dividend income	(1,540		)	(1,317		)	(1,337		)
Valuation allowance reduction	(547		)	(547		)	(548		)
Other, net	(1,086		)	(1,576		)	(629		)
Consolidated federal income tax expense (benefit)	$	(24,730	)	$	8,763		$	32,325
Reconciliation of consolidated federal income tax expense (benefit) from:
Continuing operations	$	(29,220	)	$	8,379		$	30,050
Discontinued operations	4,490			384			2,275
Consolidated federal income tax expense (benefit)	$	(24,730	)	$	8,763		$	32,325

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We remeasure certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which under the new Tax Act is 21.0 percent. However, we are still analyzing certain aspects of the Tax Act which could impact our calculations and the measurement of our deferred tax balances. The significant components of our net deferred tax liability from both continuing and discontinued operations at December 31, 2017 and 2016 are as follows:

December 31,	2017			2016
Deferred tax liabilities
Net unrealized appreciation on investment securities:
Equity securities	$	50,839		$	70,640
All other securities	7,599			3,711
Deferred policy acquisition costs	30,404			52,031
Investments in partnerships	3,653			8,112
Prepaid pension cost	3,416			4,449
Net bond discount accretion	666			1,134
Depreciation	593			854
Revaluation of investment basis (1)	545			1,342
Identifiable intangible assets (1)	1,838			3,311
Other	1,934			2,831
Gross deferred tax liability	$	101,487		$	148,415
Deferred tax assets
Financial statement reserves in excess of income tax reserves	$	17,036		$	29,174
Unearned premium adjustment	19,389			30,697
Net operating loss carryforwards	329			718
Underfunded benefit plan obligation	12,375			13,374
Post-retirement benefits other than pensions	11,942			20,221
Other-than-temporary impairment of investments	2,313			4,658
Contingent ceding commission accrual	317			2,769
Alternative minimum tax credit carryforward	6,011			1,194
Compensation expense related to stock options	3,289			4,578
Other	4,145			6,162
Gross deferred tax asset	$	77,146		$	113,545
Valuation allowance	(329		)	(718		)
Deferred tax asset	$	76,817		$	112,827
Net deferred tax liability	$	24,670		$	35,588

(1) Related to our acquisition of Mercer Insurance Group.

Due to our determination that we may not be able to fully realize the benefits of the net operating losses ("NOLs") acquired in the purchase of American Indemnity Financial Corporation in 1999, which are only available to offset the future taxable income of our property and casualty insurance operations and are further limited as to the amount that can be utilized in any given year, we have recorded a valuation allowance against these NOLs that totaled $329 and $718, respectively, at December 31, 2017 and 2016. Based on a yearly review, we determine whether the benefit of the NOLs can be realized, and, if so, the decrease in the valuation allowance is recorded as a reduction to current federal income tax expense. If NOLs expire during the year, the decrease in the valuation allowance is offset with a corresponding decrease to the deferred income tax asset. The valuation allowance was reduced by $547 during 2017 due to the realization of $1,565 in NOLs, partially offset by a $158 adjustment related to the enactment of the Tax Act, for a net reduction of $389. The valuation allowance was reduced by $547 in 2016 due to the realization of $1,565 in NOLs. No portion of the NOLs expired in 2017 and $1,565 will expire in 2018. At December 31, 2017, we had $6,011 of alternative minimum tax credit carryforwards.

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NOTE 8. EMPLOYEE BENEFITS

We offer various benefits to our employees including a noncontributory defined benefit pension plan, an employee/retiree health and dental benefit plan, a profit-sharing plan and an employee stock ownership plan.

Pension and Post-retirement Benefit Plans

We offer a noncontributory defined benefit pension plan in which all of our employees are eligible to participate after they have completed one year of service, attained 21 years of age and have met the hourly service requirements. Retirement benefits under our pension plan are based on the number of years of service and level of compensation. Our policy to fund the pension plan on a current basis to not less than the minimum amounts required by the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended, is to assure that plan assets will be adequate to provide retirement benefits. We estimate that we will contribute approximately $6,400 to the pension plan in 2018.

We also offer a health and dental benefit plan to all of our eligible employees and retirees that consists of two programs: (1) the self-funded employee health and dental benefit plan and (2) the self-funded (pre-65) and fully-funded (post-65) retiree health and dental benefit plan (the "post-retirement benefit plan"). Effective January 1, 2017, there was a plan amendment, which included the following changes: eliminated the pre-65 retirement plan with a $500 hundred dollar deductible; for retirements after January 1, 2017, the retiree will pay 50 percent of the lower cost supplemental plan if they are 65 or older and 100 percent of the premium if less than 65; and removed spousal coverage after the death of the participant. The financial impact of the changes were reflected in accumulated other comprehensive income at December 31, 2016.

The post-retirement benefit plan provides health and dental benefits to our retirees (and covered dependents) who have met the service and participation requirements stipulated by the post-retirement benefit plan. The third party administrators for the post-retirement benefit plan are responsible for making medical and dental care benefit payments. Participants are required to submit claims for reimbursement or payment to the claims administrator within twelve months after the end of the calendar year in which the charges were incurred. An unfunded benefit obligation is reported for the post-retirement benefit plan in the accompanying Consolidated Balance Sheets.

Investment Policies and Strategies

Our investment policy and objective for the pension plan is to generate long-term capital growth and income by way of a diversified investment portfolio along with appropriate employer contributions, which will allow us to provide for the pension plan's benefit obligation.

The investments held by the pension plan at December 31, 2017 include the following asset categories:

• Fixed income securities, which may include bonds, and convertible securities;

• Equity securities, which may include various types of stock, such as large-cap, mid-cap, small-cap, and international stocks;

• Pooled separate accounts, which includes two separate funds, a core plus bond separate account and a real estate separate account;

• An arbitrage fund, which is a fund that takes advantage of price discrepancies, primarily equity securities, for the same asset in different markets;

• A group annuity contract that is administered by United Life, a subsidiary of United Fire; and

• Cash and cash equivalents, which include money market funds.

We have an internal investment/retirement committee, which includes our Chief Executive Officer, Chief Investment Officer, and Chief Operating Officer, all of whom receive monthly information on the value of the pension plan

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assets and their performance. Quarterly, the committee meets to review and discuss the performance of the pension plan assets as well as the allocation of investments within the pension plan.

As of December 31, 2017, we had six external investment managers that are allowed to exercise investment discretion, subject to limitations, if any, established by the investment/retirement committee. We utilize multiple investment managers in order to maximize the pension plan's investment return while mitigating risk. None of our investment managers uses leverage in managing the pension plan. Annually, the investment/retirement committee meets with each investment manager to review the investment manager's goals, objectives and the performance of the assets they manage. The decision to establish or terminate a relationship with an investment manager is at the discretion of our investment/retirement committee.

We consider historical experience for comparable investments and the target allocations we have established for the various asset categories of the pension plan to determine the expected long-term rate of return, which is an assumption as to the average rate of earnings expected on the pension plan funds invested, or to be invested, by the pension plan, to provide for the settlement of benefits included in the projected pension benefit obligation. Investment securities, in general, are exposed to various risks, such as fluctuating interest rates, credit standing of the issuer of the security and overall market volatility. Annually, we perform an analysis of expected long-term rates of return based on the composition and allocation of our pension plan assets and recent economic conditions.

The following is a summary of the pension plan's actual and target asset allocations at December 31, 2017 and 2016 by asset category:

									Target
Pension Plan Assets	2017		% of Total		2016		% of Total		Allocation
Fixed maturity securities - corporate bonds	$	11,003	7.0	%	$	9,451	7.4	%	0	%	-	15	%
Redeemable preferred stock	3,216		2.0		3,144		2.4		0	%	-	10	%
Equity securities	87,603		55.6		69,770		54.3		50	%	-	70	%
Pooled separate accounts
Core plus bond separate account fund	17,948		11.4		10,401		8.1		0	%	-	40	%
U.S. property separate account fund	15,502		9.8		14,330		11.1		0	%	-	25	%
Arbitrage fund	8,506		5.4		8,292		6.5		0	%	-	10	%
United Life annuity	9,846		6.2		9,377		7.3		5	%	-	10	%
Cash and cash equivalents	4,020		2.6		3,665		2.9		0	%	-	10	%
Total plan assets	$	157,644	100.0	%	$	128,430	100.0	%

The investment return expectations for the pension plan are used to develop the asset allocation based on the specific needs of the pension plan. Accordingly, equity securities comprise the largest portion of our pension plan assets, as they yield the highest rate of return. The United Life annuity, which is the fifth largest asset category and was originally written by our life insurance subsidiary in 1976, provides a guaranteed rate of return. The interest rate on the group annuity contract is determined annually.

The availability of assets held in cash and cash equivalents enables the pension plan to mitigate market risk that is associated with other types of investments and allows the pension plan to maintain liquidity both for the purpose of making future benefit payments to participants and their beneficiaries and for future investment opportunities.

Valuation of Investments

Fixed Maturity and Equity Securities

Investments in equity securities are stated at fair value based upon quoted market prices reported on recognized securities exchanges on the last business day of the year. Purchases and sales of securities are recorded as of the trade date.

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The fair value of fixed maturity securities categorized as Level 2 is determined by management based on fair value

information reported in the custodial statements received from Plan’s investment managers, which is derived from

recent trading activity of the underlying security in the financial markets. These securities represent various taxable bonds held by the pension plan. These securities categorized as Level 2 are valued in the same manner as described in Part II, Item 8, Note 3 and have the same controls in place.

Pooled Separate Accounts

The pension plan invests in two pooled separate account funds, a core plus bond separate account fund and a U.S. property separate account fund. Investments in the core plus bond separate account fund are stated at fair value as provided by the administrator of the fund based on the fair value of the underlying assets owned by the fund. The fair value measurement is classified within Level 2 of the fair value hierarchy. The fair value of the investments in the U.S. property separate account fund is provided by the administrator of the fund based on the net asset value of the fund. The net asset value is based on the fair value of the underlying properties included in the fund. The fair value of the underlying properties are based on property appraisals conducted by an independent third party. The fair value measurement is classified within Level 3 of the fair value hierarchy. We have not adjusted the net asset value provided by the custodian for either fund.

Arbitrage Fund

The fair value of the arbitrage fund is determined based on its net asset value, which is obtained from the custodian and determined monthly with issuances and redemptions of units of the fund made, based on the net asset value per unit as determined on the valuation date. We have not adjusted the net asset value provided by the custodian.

United Life Annuity

The United Life group annuity contract, which is a deposit administration contract, is stated at contract value as determined by United Life. Under the group annuity contract, the plan's investment account is credited with compound interest on the average account balance for the year. The interest rate is equivalent to the ratio of net investment income to mean assets of United Life, net of investment expenses.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of insured cash and money market funds held with various financial institutions. Interest is earned on a daily basis. The fair value of these funds approximates their cost basis due to their short-term nature.

Fair Value Measurement

The following tables present the categorization of the pension plan's assets measured at fair value on a recurring basis at December 31, 2017 and 2016:

			Fair Value Measurements
Description	December 31, 2017		Level 1		Level 2		Level 3
Fixed maturity securities - corporate bonds	$	11,003	$	—	$	11,003	$	—
Redeemable preferred stock	3,216		3,216		—		—
Equity securities	87,603		87,603		—		—
Pooled separate accounts
Core plus bond separate account fund	17,948		—		17,948		—
U.S. property separate account fund	15,502		—		—		15,502
Arbitrage fund	8,506		—		8,506		—
Money market funds	4,011		4,011		—		—
Total assets measured at fair value	$	147,789	$	94,830	$	37,457	$	15,502

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			Fair Value Measurements
Description	December 31, 2016		Level 1		Level 2		Level 3
Fixed maturity securities - corporate bonds	$	9,451	$	—	$	9,451	$	—
Redeemable preferred stock	3,144		3,144		—		—
Equity securities	69,770		69,770		—		—
Pooled separate accounts
Core plus bond separate account fund	10,401		—		10,401		—
U.S. property separate account fund	14,330		—		—		14,330
Arbitrage fund	8,292		—		8,292		—
Money market funds	3,659		3,659		—		—
Total assets measured at fair value	$	119,047	$	76,573	$	28,144	$	14,330

There were no transfers of assets in or out of Level 1 or Level 2 during the period.

The fair value of investments categorized as Level 1 is based on quoted market prices that are readily and regularly available.

The fair value of fixed maturity securities categorized as Level 2 is determined by management based on fair value information reported in the custodial statements, which is derived from recent trading activity of the underlying security in the financial markets. These securities represent various taxable bonds held by the pension plan. These securities categorized as Level 2 are valued in the same manner as described in Part II, Item 8, Note 3 and have the same controls in place.

The fair value of the arbitrage fund and bond and mortgage pooled separate account fund are categorized as Level 2 since there are no restrictions as to the pension plan's ability to redeem its investment at the net asset value of the fund as of the reporting date.  

The following tables provide a summary of the changes in fair value of the pension plan's Level 3 securities:

	U.S. property separate account fund
Balance at January 1, 2017	$	14,330
Unrealized gains	1,172
Balance at December 31, 2017	$	15,502

	U.S. property separate account fund
Balance at January 1, 2016	$	11,252
Unrealized gains	1,078
Purchases	2,000
Balance at December 31, 2016	$	14,330

Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate

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of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31. In estimating the discount rate, we look to rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of the respective plan's benefit obligations.

In October 2014, the Society of Actuaries finalized a new mortality table and a new mortality improvement scale. The mortality improvement scale was further refined by the Society of Actuaries in 2015, 2016 and 2017. These updated tables reflect improved life expectancies and an expectation that the trend will continue. We have reviewed these updated tables and have updated the mortality assumptions based on this information and also based on research provided by our external actuaries. We will continue to monitor mortality assumptions and make changes as appropriate to reflect additional research and our resulting best estimate of future mortality rates.

Assumptions Used to Determine Benefit Obligations

The following actuarial assumptions were used to determine the reported plan benefit obligations at December 31:

Weighted-average assumptions as of	Pension Benefits				Post-retirement Benefits
December 31,	2017		2016		2017		2016
Discount rate	3.65	%	4.17	%	3.65	%	4.17	%
Rate of compensation increase	3.00		3.00		N/A		N/A

Decreasing interest rates resulted in a decrease in the discount rates we use to value our respective plan's benefit obligations at December 31, 2017 compared to December 31, 2016.

Assumptions Used to Determine Net Periodic Benefit Cost

The following actuarial assumptions were used at January 1 to determine our reported net periodic benefit costs for the year ended December 31:

Weighted-average assumptions as of	Pension Benefits						Post-retirement Benefits
January 1,	2017		2016		2015		2017		2016		2015
Discount rate	4.17	%	4.21	%	3.86	%	4.17	%	4.21	%	3.86	%
Expected long-term rate of return on plan assets	7.50		7.50		7.50		N/A		N/A		N/A
Rate of compensation increase	3.00		3.00		3.00		N/A		N/A		N/A

Assumed Health Care Cost Trend Rates

	Health Care Benefits				Dental Claims
Years Ended December 31,	2017		2016		2017		2016
Health care cost trend rates assumed for next year	7.00	%	7.00	%	4.00	%	4.00	%
Rate to which the health care trend rate is assumed to decline (ultimate trend rate)	4.50	%	4.50	%	N/A		N/A
Year that the rate reaches the ultimate trend rate	2026		2025		N/A		N/A

Assumed health care cost trend rates have a significant effect on the amounts reported for the post-retirement benefit plan. A 1.0 percent change in assumed health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
Effect on the net periodic post-retirement health care benefit cost	$	1,126	$	(883	)
Effect on the accumulated post-retirement benefit obligation	9,487		(7,698		)

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Benefit Obligation and Funded Status

The following table provides a reconciliation of benefit obligations, plan assets and funded status of our plans:

	Pension Benefits						Post-retirement Benefits
Years Ended December 31,	2017			2016			2017			2016
Reconciliation of benefit obligation
Benefit obligation at beginning of year	$	171,876		$	160,390		$	46,785		$	72,175
Service cost	6,857			6,490			2,021			3,728
Interest cost	7,060			6,654			1,927			3,015
Actuarial loss	26,963			2,215			6,326			1,468
Adjustment for plan amendment	—			—			—			(32,289		)
Benefit payments	(4,407		)	(3,873		)	(1,331		)	(1,312		)
Benefit obligation at end of year (1)	$	208,349		$	171,876		$	55,728		$	46,785
Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year	$	128,430		$	106,600		$	—		$	—
Actual return on plan assets	22,225			9,320			—			—
Employer contributions	11,396			16,383			1,331			1,311
Benefit payments	(4,407		)	(3,873		)	(1,331		)	(1,311		)
Fair value of plan assets at end of year	$	157,644		$	128,430		$	—		$	—
Funded status at end of year	$	(50,705	)	$	(43,446	)	$	(55,728	)	$	(46,785	)

(1) For the pension plan, the benefit obligation is the projected benefit obligation. For the post-retirement benefit plan, the benefit obligation is the accumulated post-retirement benefit obligation.

Our accumulated pension benefit obligation was $184,436 and $152,620 at December 31, 2017 and 2016, respectively.

The following table displays the effect that the unrecognized prior service cost and unrecognized actuarial loss of our plans had on accumulated other comprehensive income ("AOCI"), as reported in the accompanying Consolidated Balance Sheets:

	Pension Benefits				Post-retirement Benefits
Years Ended December 31	2017		2016		2017			2016
Amounts recognized in AOCI
Unrecognized prior service cost	$	—	$	—	$	(26,880	)	$	(32,289	)
Unrecognized actuarial (gain) loss	60,571		49,745		25,235			20,756
Total amounts recognized in AOCI	$	60,571	$	49,745	$	(1,645	)	$	(11,533	)

We anticipate amortization of the net actuarial losses for our pension plan in 2018 to be $4,287. We anticipate amortization of the net actuarial losses for our post-retirement benefit plan in 2018 to be $2,355.

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Net Periodic Benefit Cost

The components of the net periodic benefit cost for our pension and post-retirement benefit plans are as follows:

	Pension Plan									Post-retirement Benefit Plan
Years Ended December 31,	2017			2016			2015			2017			2016		2015
Net periodic benefit cost
Service cost	$	6,857		$	6,490		$	6,675		$	2,021		$	3,728	$	5,220
Interest cost	7,060			6,654			5,999			1,927			3,015		2,856
Expected return on plan assets	(9,650		)	(7,952		)	(7,800		)	—			—		—
Amortization of prior service cost	—			—			—			(5,409		)	—		—
Amortization of net loss	3,562			3,968			4,546			1,846			1,518		2,920
Net periodic benefit cost	$	7,829		$	9,160		$	9,420		$	385		$	8,261	$	10,996

Projected Benefit Payments

The following table summarizes the expected benefits to be paid from our plans over the next 10 years:

	2018		2019		2020		2021		2022		2023 - 2027
Pension benefits	$	5,620	$	6,140	$	6,780	$	7,520	$	8,240	$	52,950
Post-retirement benefits	$	1,350	$	1,540	$	1,700	$	1,880	$	2,050	$	13,310

Profit-Sharing Plan and Employee Stock Ownership Plan

We have a profit-sharing plan in which employees who meet service requirements are eligible to participate. The amount of our contribution is discretionary and is determined annually, but cannot exceed the amount deductible for federal income tax purposes. Our contribution to the profit-sharing plan for 2017, 2016 and 2015, was $4,987, $2,904 and $7,706, respectively.

Prior to October 31, 2015 we had an employee stock ownership plan (the "ESOP") for the benefit of eligible employees and their beneficiaries. In June 2015, the plan administrator decided to merge the ESOP into the United Fire Group, Inc. 401K Plan effective October 31, 2015. Participant ESOP account balances were transferred to each participant’s 401K Plan.

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NOTE 9. STOCK-BASED COMPENSATION

Non-Qualified Employee Stock Award Plan

The United Fire Group, Inc. 2008 Stock Plan (the "2008 Stock Plan") authorized the issuance of restricted and unrestricted stock awards, stock appreciation rights, incentive stock options, and non-qualified stock options for up to 1,900,000 shares of United Fire common stock to employees. In May 2014, the Registrant's shareholders approved an additional 1,500,000 shares of United Fire common stock issuable at any time and from time to time pursuant to the 2008 Stock Plan, among other amendments, and renamed such plan as the United Fire Group, Inc. Stock Plan, (as amended, the "Stock Plan"). At December 31, 2017, there were 996,828 authorized shares remaining available for future issuance. The Stock Plan is administered by the Board of Directors, which determines those employees who will receive awards, when awards will be granted, and the terms and conditions of the awards. The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Stock Plan. Pursuant to the Stock Plan, the Board of Directors may, at its sole discretion, grant awards to our employees who are in positions of substantial responsibility with United Fire.

Options granted pursuant to the Stock Plan are granted to buy shares of United Fire's common stock at the market value of the stock on the date of grant. All outstanding option awards vest and are exercisable in installments of 20.0 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. To the extent not exercised, vested option awards accumulate and are exercisable by the awardee, in whole or in part, in any subsequent year included in the option period, but not later than 10 years from the grant date. Restricted and unrestricted stock awards granted pursuant to the Stock Plan are granted at the market value of our common stock on the date of the grant. Restricted stock awards fully vest after 3 years or 5 years from the date of issuance, unless accelerated upon the approval of the Board of Directors, at which time United Fire common stock will be issued to the awardee. All awards are generally granted free of charge to the eligible employees of United Fire as designated by the Board of Directors.

The activity in the Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Year Ended December 31, 2017		From Inception to December 31, 2017
Beginning balance	1,248,651		1,900,000
Additional shares authorized	—		1,500,000
Number of awards granted	(259,405	)	(2,871,971	)
Number of awards forfeited or expired	7,582		468,799
Ending balance	996,828		996,828
Number of option awards exercised	136,827		1,085,895
Number of unrestricted stock awards granted	1,145		8,470
Number of restricted stock awards vested	1,198		38,168

Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan

The United Fire Group, Inc. 2005 Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan (the "Director Plan") authorizes the issuance of restricted stock awards and non-qualified stock options to purchase shares of United Fire's common stock to non-employee directors. At December 31, 2017, we had 61,813 authorized shares available for future issuance.

The Board of Directors has the authority to determine which non-employee directors receive awards, when options and restricted stock shall be granted, the option price, the option expiration date, the date of grant, the vesting schedule of options or whether the options shall be immediately vested, the terms and conditions of options and restricted stock (other than those terms and conditions set forth in the plan) and the number of shares of common stock to be issued pursuant to an option agreement or restricted stock agreement (subject to limits set forth in the plan). The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Director Plan.

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The activity in the Director Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Year Ended December 31, 2017		From Inception to December 31, 2017
Beginning balance	74,771		300,000
Number of awards granted	(12,958	)	(262,190	)
Number of awards forfeited or expired	—		24,003
Ending balance	61,813		61,813
Number of option awards exercised	36,808		89,281
Number of restricted stock awards vested	22,716		54,272

Stock-Based Compensation Expense

In 2017, 2016 and 2015, we recognized stock-based compensation expense of $4,808, $3,696 and $2,510, respectively. Stock-based compensation expense is recognized over the vesting period of the stock options.

As of December 31, 2017, we had $8,350 in stock-based compensation expense that has yet to be recognized through our results of operations. We expect this compensation to be recognized in subsequent years according to the following table, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated.

2018	$	4,028
2019	2,776
2020	1,116
2021	390
2022	40
Total	$	8,350

Analysis of Award Activity

The analysis below details the award activity for 2017 and the awards outstanding at December 31, 2017, for both of our plans and ad hoc options, which were granted prior to the adoption of the other plans:

Options	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Life (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	1,120,677		$	29.08
Granted	159,709		41.75
Exercised	(173,635	)	27.52
Forfeited or expired	(5,700	)	28.66
Outstanding at December 31, 2017	1,101,051		$	31.16	6.52	$	15,875
Exercisable at December 31, 2017	495,089		$	26.77	3.22	$	9,311

Intrinsic value is the difference between our share price on the last day of trading (i.e., December 31, 2017) and the price of the options when granted and represents the value that would have been received by option holders had they exercised their options on that date. These values change based on the fair market value of our shares. The intrinsic value of options exercised totaled $3,159, $4,339 and $1,546 in 2017, 2016 and 2015, respectively.

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The analysis below details the award activity for the restricted stock and restricted stock unit awards outstanding at December 31, 2017:

Restricted stock awards	Shares		Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2017	182,086		$	34.08
Granted	111,509		41.94
Vested	(23,914	)	36.77
Forfeited	(1,882	)	40.27
Non-vested at December 31, 2017	267,799		$	37.07

In 2017, 2016 and 2015 we recognized $2,987, $1,766 and $924, respectively, in compensation expense related to the restricted stock and restricted stock unit awards. At December 31, 2017, we had $5,107 in compensation expense that has yet to be recognized through our results of operations related to the restricted stock and restricted stock unit awards. The intrinsic value of the non-vested restricted stock and restricted stock unit awards outstanding totaled $2,279, $2,747 and $1,520 at December 31, 2017, 2016 and 2015, respectively.

Assumptions

The weighted-average grant-date fair value of the options granted under our plans has been estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

December 31,	2017			2016			2015
Risk-free interest rate	2.23		%	1.53		%	1.94		%
Expected volatility	27.58		%	25.44		%	21.92		%
Expected option life (in years)	7			7			7
Expected dividends (in dollars)	$	1.00		$	0.88		$	0.80
Weighted-average grant-date fair value of options granted during the year (in dollars)	$	9.93		$	8.42		$	4.98

The following table summarizes information regarding the stock options outstanding and exercisable at December 31, 2017:

				Options Outstanding				Options Exercisable
Range of Exercise Prices				Number Outstanding (in shares)	Weighted-Average Remaining Contractual Life (in years)	Weighted-Average Exercise Price		Number Exercisable (in shares)	Weighted-Average Exercise Price
$	15.01	-	21.00	100,805	3.23	$	20.24	100,805	$	20.24
21.01		-	28.00	159,478	4.52	23.38		127,077	23.23
28.01		-	35.00	508,630	6.42	29.49		235,833	29.74
35.01		-	43.00	332,138	8.63	40.77		31,374	39.84
$	15.01	-	43.00	1,101,051	6.52	$	31.16	495,089	$	26.77

NOTE 10. SEGMENT INFORMATION

On September 19, 2017, the Company announced that it had agreed to sell its subsidiary, United Life Insurance Company, to Kuvare. As a result, our life insurance business has been considered held for sale and reported as discontinued operations in the Consolidated Financial Statements and all comparable prior periods have been presented to conform to the current year presentation. The sale is expected to close in the first half of 2018, subject

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to customary conditions, including regulatory approval. For more information, refer to Note 17. "Discontinued Operations."

Prior to the announcement to sell our subsidiary, United Life Insurance Company, we had two reportable business segments in our operations: property and casualty insurance and life insurance. The property and casualty insurance business has six domestic locations from which it conducts its business. The life insurance business operates from our home office. Because all of our insurance is sold domestically, we have no revenues allocable to foreign operations.

After the announcement of the sale of our life insurance business, the Company has a single reportable segment, the property and casualty insurance business, which includes all continuing operations. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. The property and casualty insurance business geographic concentration did not change after the announcement of the sale of the life insurance business. We will continue to evaluate our segment on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP.

The accounting policies of our businesses are the same as those described in Note 1 to our Consolidated Financial Statements. We analyze results based on profitability (i.e., loss ratios), expenses and return on equity.

Property and Casualty Insurance Business

We write both commercial and personal lines of property and casualty insurance. We focus on our commercial lines, which represented 92.9% of our property and casualty insurance premiums earned for 2017. Our personal lines represented 7.1% of our property and casualty insurance premiums earned for 2017.

Products

Our primary commercial policies are tailored business packages that include the following coverages: fire and allied lines, other liability, automobile, workers' compensation and surety. Our personal lines consist primarily of automobile and fire and allied lines coverage, including homeowners.

Pricing

Pricing levels for our property and casualty insurance products are influenced by many factors, including an estimation of expected losses, the expenses of producing, issuing and servicing business and managing claims, the time value of money associated with such loss and expense cash flows, and a reasonable allowance for profit. We have a disciplined approach to underwriting and risk management that emphasizes profitable growth rather than premium volume or market share. Our insurance company subsidiaries are subject to state laws and regulations regarding rate and policy form approvals. The applicable state laws and regulations establish standards in certain lines of business to ensure that rates are not excessive, inadequate, unfairly discriminatory, or used to engage in unfair price competition. Our ability to increase rates and the relative timing of the process are dependent upon each respective state's requirements, as well as the competitive market environment.

Seasonality

Our property and casualty insurance business experiences some seasonality with regard to premiums written, which are generally highest in January and July and lowest during the fourth quarter. Although we experience some seasonality in our premiums written, premiums are earned ratably over the period of coverage. Losses and loss settlement expenses incurred tend to remain consistent throughout the year, with the exception of catastrophe losses

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which generally are highest in the second and third quarters. Catastrophes inherently are unpredictable and can occur at any time during the year from man-made or natural disaster events that include, but are not limited to, hail, tornadoes, hurricanes and windstorms.

Premiums Earned

The following table sets forth our net premiums earned:

Years Ended December 31,	2017		2016		2015
Continuing Operations - Property and casualty insurance business
Net premiums earned
Other liability	$	306,480	$	289,982	$	261,303
Fire and allied lines	270,716		265,221		246,450
Automobile	277,511		239,216		210,090
Workers' compensation	104,166		103,605		95,672
Fidelity and surety	24,981		22,507		21,362
Reinsurance assumed	10,650		12,765		13,639
Other	2,988		2,835		3,179
Total net premiums earned from continuing operations	$	997,492	$	936,131	$	851,695
Discontinued Operations - Life insurance business
Net premiums earned
Ordinary life (excluding universal life)	$	35,388	$	63,668	$	53,114
Universal life policy fees	13,145		11,577		12,834
Immediate annuities with life contingencies	11,691		10,533		12,223
Accident and health	1,096		1,434		1,425
Other	48		58		388
Total net premiums earned from discontinued operations	$	61,368	$	87,270	$	79,984

Total revenue includes sales to external customers and intercompany sales that are eliminated to arrive at the total revenues as reported in the accompanying Consolidated Statements of Income and Comprehensive Income. We account for intercompany sales on the same basis as sales to external customers.

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NOTE 11. QUARTERLY SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth our selected unaudited quarterly financial information from continuing operations:

(In Thousands Except Share Data)
Quarters	First		Second			Third			Fourth		Total
Year Ended December 31, 2017
Total revenues	$	251,278	$	258,487		$	269,617		$	273,355	$	1,052,737
Income (loss) before income taxes	23,006		(4,331		)	(32,394		)	29,369		15,650
Net income (loss)	$	18,584	$	109		$	(19,082	)	$	45,259	$	44,870
Basic earnings per share (1)	$	0.73	$	—		$	(0.77	)	$	1.81	$	1.79
Diluted earnings per share (1)	0.72		—			(0.77		)	1.78		1.75
Year Ended December 31, 2016
Total revenues	$	231,334	$	244,866		$	255,625		$	264,537	$	996,362
Income before income taxes	28,165		1,372			14,035			13,925		57,497
Net income	$	22,020	$	3,435		$	11,628		$	12,035	$	49,118
Basic earnings per share (1)	$	0.87	$	0.13		$	0.46		$	0.46	$	1.94
Diluted earnings per share (1)	0.86		0.13			0.45			0.46		1.90

(1) The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.

The following table sets forth our selected unaudited quarterly financial information from discontinued operations:

(In Thousands Except Share Data)
Quarters	First		Second			Third		Fourth			Total
Year Ended December 31, 2017
Total revenues	$	31,781	$	28,492		$	27,054	$	28,386		$	115,713
Income before income taxes	2,083		4,386			1,880		2,294			10,643
Net income	$	1,352	$	2,849		$	1,218	$	734		$	6,153
Basic earnings per share (1)	$	0.05	$	0.11		$	0.05	$	0.03		$	0.24
Diluted earnings per share (1)	0.05		0.11			0.05		0.03			0.24
Year Ended December 31, 2016
Total revenues	$	34,351	$	34,907		$	33,869	$	37,458		$	140,585
Income (loss) before income taxes	609		(508		)	1,140		(71		)	1,170
Net income (loss)	$	407	$	(321	)	$	740	$	(40	)	$	786
Basic earnings per share (1)	$	0.02	$	(0.01	)	$	0.03	$	—		$	0.03
Diluted earnings per share (1)	0.02		(0.01		)	0.03		—			0.03

(1) The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.

NOTE 12. EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options and restricted stock awards.

We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options

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exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.

The components of basic and diluted earnings per share were as follows:

	Years Ended December 31,
	2017				2016				2015
(In Thousands Except Share and Per Share Data)	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income from continuing operations	$	44,870	$	44,870	$	49,118	$	49,118	$	85,320	$	85,320
Weighted-average common shares outstanding	25,103,720		25,103,720		25,335,706		25,335,706		25,047,405		25,047,405
Add dilutive effect of restricted stock awards	—		250,530		—		155,059		—		122,840
Add dilutive effect of stock options	—		286,354		—		313,913		—		65,751
Weighted-average common shares	25,103,720		25,640,604		25,335,706		25,804,678		25,047,405		25,235,996
Earnings per common share from continuing operations	$	1.79	$	1.75	$	1.94	$	1.90	$	3.41	$	3.38
Earnings per common share from discontinued operations	0.24		0.24		0.03		0.03		0.15		0.15
Earnings per common share	$	2.03	$	1.99	$	1.97	$	1.93	$	3.56	$	3.53
Awards excluded from diluted calculation(1)	—		—		—		—		—		343,390

(1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.

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NOTE 13. LEASE COMMITMENTS

At December 31, 2017, we were obligated under noncancelable operating lease agreements for office space, vehicles, computer equipment and office equipment. Most of our leases include renewal options, purchase options or both. These provisions may be exercised by us upon the expiration of the related lease agreements. Rental expense under our operating lease agreements was $7,197, $6,908 and $6,256 for 2017, 2016 and 2015, respectively. Our most significant lease commitment is for mainframe computer equipment. This lease was signed in November 2016 and has a term of 5 years. The monthly lease payments for this lease are $154.

At December 31, 2017, our future minimum rental payments were as follows:

2018	$	6,435
2019	6,027
2020	5,529
2021	3,173
2022	643
Thereafter	718
Total	$	22,525

NOTE 14. CREDIT FACILITY

On February 2, 2016, the Company, as borrower, entered into a Credit Agreement (the "Credit Agreement") by and among the Company, with the lenders from time to time party thereto and KeyBank National Association ("Key Bank"), as administrative agent, swingline lender and letter of credit issuer. The Credit Agreement provides for a $50,000four-year unsecured revolving credit facility that includes a $20,000 letter of credit subfacility and a swingline subfacility in the amount up to $5,000. The Credit Agreement allows the Company to increase the aggregate amount of the commitments thereunder by up to $100,000, provided that no event of default has occurred and is continuing and certain other conditions are satisfied.

The Credit Agreement is available for the Company's general corporate purposes, including liquidity, acquisitions and working capital. All unpaid principal and accrued interest under the Credit Agreement is due and payable in full at maturity on February 2, 2020. Based on the type of loan, advances under the Credit Agreement would bear interest on either the London interbank offered rate ("LIBOR") or a base rate plus, in each case, a calculated margin amount.

The unused commitments under the Credit Agreement will be subject to a commitment fee that will be calculated at a per annum rate. The applicable margins for borrowings under the Credit Agreement and the commitment fee thereunder will be determined by reference to a pricing grid based on the Company’s issuer credit rating by A.M. Best Company, Inc.

The Credit Agreement contains customary representations, conditions to borrowing, covenants and events of default, including certain covenants that limit or restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to sell or transfer assets, enter into a merger or consolidate with another company, create liens, impose restrictions on subsidiary dividends, enter into sale-leaseback transactions, make investments or acquisitions, enter into certain reinsurance agreements, pay dividends during any period of default, enter into transactions with affiliates, change the nature of its business, or incur indebtedness. The Credit Agreement also includes financial covenants that require the Company to (i) maintain a minimum consolidated net worth, (ii) maintain a minimum consolidated statutory surplus and (iii) not exceed a 0.35 to 1.0 debt to total capitalization ratio. As of December 31, 2017 we were in compliance with all covenants of the Credit Agreement.

There was no outstanding balance on the Credit Agreement at December 31, 2017 or 2016. We did not incur any interest expense related to the Credit Agreement in 2017, 2016 or under our prior credit facility in 2015.

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NOTE 15. INTANGIBLE ASSETS

The carrying value of our goodwill was $15,091 at both December 31, 2017 and 2016, respectively. The goodwill is fully allocated to our property and casualty insurance business.

Our major classes of intangible assets are presented in the following table:

	Year Ended December 31,
	2017			2016
Agency relationships	$	10,338		$	10,338
Accumulated amortization - agency relationships	(5,566		)	(4,929		)
	$	4,772		$	5,409
Software	$	3,260		$	3,260
Accumulated amortization - software	(3,260		)	(3,260		)
	$	—		$	—
Trade names	$	1,978		$	1,978
Accumulated amortization - trade names	(890		)	(758		)
	$	1,088		$	1,220
Favorable contract	$	286		$	286
Accumulated amortization - favorable contract	(286		)	(286		)
	$	—		$	—
State insurance licenses (1)	$	3,020		$	3,020
Net intangible assets	$	8,880		$	9,649

(1) The intangible asset for licenses has an indefinite life and therefore is not amortized.

The estimated useful lives assigned to our major classes of amortizable intangible assets are as follows:

	Useful Life
Agency relationships	Fifteen years
Software	Two years
Trade names	Fifteen years
Favorable contract	Two years

Our estimated aggregate amortization expense for each of the next five years is as follows:

2018	$	719
2019	709
2020	709
2021	709
2022	709

145

NOTE 16. ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2017, 2016 and 2015:

				Liability for
	Net unrealized			underfunded
	appreciation			employee
	on investments			benefit costs			Total
Balance as of January 1, 2015	$	149,623		$	(58,450	)	$	91,173
Change in accumulated other comprehensive income before reclassifications	(18,321		)	5,664			(12,657		)
Reclassification adjustments from accumulated other comprehensive income	(2,933		)	4,854			1,921
Balance as of December 31, 2015	$	128,369		$	(47,932	)	$	80,437
Change in accumulated other comprehensive income before reclassifications	8,461			19,529			27,990
Reclassification adjustments from accumulated other comprehensive income	(2,938		)	3,566			628
Balance as of December 31, 2016	$	133,892		$	(24,837	)	$	109,055
Change in accumulated other comprehensive income before reclassifications	48,467			(19,878		)	28,589
Reclassification adjustments from accumulated other comprehensive income	(4,152		)	3,514			(638		)
Accumulated effect of change in enacted tax rate	36,658			(5,350		)	31,308
Balance as of December 31, 2017	$	214,865		$	(46,551	)	$	168,314

146

NOTE 17. DISCONTINUED OPERATIONS

On September 18, 2017, we signed a definitive agreement to sell our subsidiary, United Life Insurance Company, to Kuvare for $280,000 in cash, subject to specified adjustments as set forth in the definitive agreement. As a result, our life insurance business (previously reported as a separate segment) has been considered held for sale and reported as discontinued operations and its financial position, results of operations and cash flows are separately reported for all periods presented, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval.

Subsequent to the close of the sale in the first half of 2018, UFG will provide services to Kuvare through a transition services agreement ("TSA"). The TSA will be put in place to ensure a seamless transfer of the business between UFG and Kuvare. The TSA includes, among other services, accounting management, human resources, legal and information technology services, from the closing date for up to 24 months.

The assets and liabilities associated with discontinued operations prior to the closing of the sale have been presented separately in our Consolidated Balance Sheets. The major assets and liability categories were as follows as of the dates indicated:

Discontinued Operations
Balance Sheets
	December 31,
(In Thousands, Except Share Data)	2017		2016
Assets
Investments
Fixed maturities
Held-to-maturity, at amortized cost (fair value $34 in 2017 and $49 in 2016)	$	34	$	48
Available-for-sale, at fair value (amortized cost $1,412,291 in 2017 and $1,429,270 in 2016)	1,430,025		1,444,840
Equity Securities available-for-sale, at fair value (cost $5,099 in 2017 and $8,510 in 2016)	23,653		24,046
Mortgage loans	3,435		3,706
Policy loans	5,815		5,366
Other long-term investments	16,437		15,870
	1,479,399		1,493,876
Cash and cash equivalents	15,851		21,659
Deferred policy acquisition costs	71,151		70,750
Other assets	19,733		19,333
Total assets held for sale	$	1,586,134	$	1,605,618
Liabilities
Future policy benefits and losses	$	1,320,401	$	1,350,503
Deferred income taxes	18,716		27,739
Accrued expenses and other liabilities	8,018		11,981
Total liabilities held for sale	$	1,347,135	$	1,390,223

147

Summary operating results of discontinued operations were as follows for the periods indicated:

Discontinued Operations
Statements of Income
	For the Years Ended December 31,
(In Thousands, Except Share Data)	2017		2016		2015
Revenues
Net premiums earned	$	61,368	$	87,270	$	79,195
Investment income, net of investment expenses	49,720		51,538		54,222
Net realized investment gains (losses)
Other-than-temporary impairment charges	—		—		(1,300		)
Net realized investment gains	4,008		1,156		3,022
Total net realized investment gains	4,008		1,156		1,722
Other income	617		621		508
Total revenues	$	115,713	$	140,585	$	135,647
Benefits, Losses and Expenses
Losses and loss settlement expenses	$	40,451	$	31,365	$	29,001
Increase in liability for future policy benefits	27,632		59,969		50,945
Amortization of deferred policy acquisition costs	5,181		8,121		6,634
Other underwriting expenses	13,281		19,881		19,306
Interest on policyholders’ accounts	18,525		20,079		23,680
Total benefits, losses and expenses	$	105,070	$	139,415	$	129,566
Income from discontinued operations before income taxes	$	10,643	$	1,170	$	6,081
Federal income tax expense	4,490		384		2,275
Net income from discontinued operations	$	6,153	$	786	$	3,806
Earnings per common share from discontinued operations:
Basic	$	0.24	$	0.03	$	0.15
Diluted	0.24		0.03		0.15

The Company's Consolidated Statement of Cash Flows presents operating, investing and financing cash flows of the discontinued operations separately. The Company's cash management and financial management of both continued and discontinued operations is consolidated as a centralized corporate function in our Finance Department.

148

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

United Fire Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of United Fire Group, Inc. (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2017 and 2016, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP  

Ernst & Young LLP 

We have served as the Company’s auditor since 2002.

Des Moines, Iowa

February 28, 2018

149

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of the end of the period covered by this report, were designed and functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of United Fire Group, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. United Fire Group, Inc.'s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its Consolidated Financial Statements for external purposes in accordance with U.S. generally accepted accounting principles.

As of December 31, 2017, United Fire Group, Inc.'s management assessed the effectiveness of United Fire Group Inc.'s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in "Internal Control — Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the assessment, United Fire Group, Inc.'s management determined that effective internal control over financial reporting was maintained as of December 31, 2017, based on those criteria.

Ernst & Young LLP, the independent registered public accounting firm that audited the Consolidated Financial Statements of United Fire Group, Inc. included in this Annual Report on Form 10-K, has audited the effectiveness of internal control over financial reporting as of December 31, 2017. Their attestation report, which expresses an unqualified opinion on the effectiveness of United Fire Group, Inc.'s internal control over financial reporting as of December 31, 2017, is included in this Item under the heading "Report of Independent Registered Public Accounting Firm."

150

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

United Fire Group, Inc.

Opinion on Internal Control over Financial Reporting

We have audited United Fire Group, Inc.’s (the Company) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2017 consolidated financial statements of the Company and our report dated February 28, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Annual Report. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

151

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

	/s/ Ernst & Young LLP
	Ernst & Young LLP
Des Moines, Iowa
February 28, 2018

152

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15 and 15d-15) that occurred during the fiscal quarter ended December 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

153

ITEM 9B. OTHER INFORMATION

None.

PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 regarding the Company’s executive officers is included in '"Executive Officers of the Company" under Part I, Item 1 of this report.

The information required by this Item regarding our directors and corporate governance matters is included under the captions "Board of Directors," subheading "Corporate Governance" and "Proposal One-Election of Directors," in our definitive Proxy Statement for our annual meeting of shareholders to be held on May 16, 2018 (the "2018 Proxy Statement") and is incorporated herein by reference.

The information required by this Item regarding our Code of Ethics is included under the caption "Board of Directors," subheading "Corporate Governance," subpart "Code of Ethics" in our 2018 Proxy Statement and is incorporated herein by reference.

The information required by this Item regarding compliance with Section 16(a) of the Exchange Act is included under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in our 2018 Proxy Statement and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required under this Item regarding our executive compensation and our Compensation Committee Report is included under the caption "Executive Compensation" and the subheadings "Report of the Compensation Committee" and "Pay Ratio Disclosure" in our 2018 Proxy Statement and is incorporated herein by reference. The information required by this Item regarding Compensation Committee interlocks and insider participation is included under the caption "Board of Directors," subheading "Committees of the Board," subheading "Compensation Committee," subpart "Compensation Committee Interlocks and Insider Participation" in our 2018 Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The information required under this Item is included under the captions "Security Ownership of Certain Beneficial Owners," "Security Ownership of Management" and "Securities Authorized for Issuance under Equity Compensation Plans" in our 2018 Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required under this Item is included under the captions "Board of Directors" and "Transactions with Related Persons" in our 2018 Proxy Statement and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required under this Item is included under the caption "Proposal Two - Ratification of the Audit Committee's Appointment of Independent Registered Public Accounting Firm," subheading "Information About Our Independent Registered Public Accounting Firm" in our 2018 Proxy Statement and is incorporated herein by reference.

154

PART IV.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

We have filed the following documents as part of this Annual Report on Form 10-K:

	Page
(a) 1. Financial Statements
Consolidated Balance Sheets at December 31, 2017 and 2016	74
Consolidated Statements of Income and Comprehensive Income for the three years ended December 31, 2017	75
Consolidated Statements of Stockholders' Equity for the three years ended December 31, 2017	76
Consolidated Statements of Cash Flows for the three years ended December 31, 2017	77
Notes to Consolidated Financial Statements	79
(a) 2. Financial Statement Schedules required to be filed by Item 8 of this Form:
Schedule I. Summary of Investments — Other than Investments in Related Parties	159
Schedule II. Condensed Financial Statements of Parent Company	161
Schedule III: Supplementary Insurance Information	164
Schedule IV: Reinsurance	165
Schedule V: Valuation and Qualifying Accounts	166
Schedule VI: Supplemental Information Concerning Property and Casualty Insurance Operations	167
All other schedules have been omitted as not required, not applicable, not deemed material or because the information is included in the Consolidated Financial Statements.

155

(a) 3. Exhibit Index:

				Incorporated by reference
Exhibit number		Exhibit description	Filed herewith	Form	Period ending	Exhibit	Filing date
2.1†		Stock Purchase Agreement, dated as of September 18, 2017, between United Fire & Casualty Company and Kuvare US Holdings, Inc., including the exhibits attached thereto (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, Filed on September 19, 2017).		8-K		2.1	9/19/2017
3.1		Articles of Incorporation of United Fire Group, Inc.		S-4		Annex II	5/25/2011
3.2		Articles of Amendment to Articles of Incorporation of United Fire Group, Inc.		8-KA		3.1	5/26/2015
3.3		Bylaws of United Fire Group, Inc.		S-4		Annex III	5/25/2011
10.1		Employee Stock Purchase Plan		10-K	12/31/2007	10.2	2/27/2008
10.2	*	2005 Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan (as amended)		DEF14A		Exhibit A	4/18/2011
10.4	*	United Fire Group, Inc. Amended and Restated Annual Incentive Plan		10-K	12/31/2011	10.4	3/15/2012
10.5	*	Non-qualified Deferred Compensation Plan		10-Q	9/30/2007	10.3	10/25/2007
10.6	*	United Fire Group, Inc. Stock Plan, amended as of February 21, 2014 (amending and restating the United Fire & Casualty Company 2008 Stock Plan) (the "Stock Plan")		DEF14A		App A	4/8/2014
10.7	*	Form of Non-Qualified Employee Stock Option Agreement under the Stock Plan		10-K	12/31/2007	10.7	2/27/2008
10.8	*	Form of Option Issued Pursuant to the 2005 Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan		10-K	12/31/2007	10.8	2/27/2008
10.9	*	Form of Stock Award Agreement Under the Stock Plan		8-K		99.2	5/22/2008
10.10	*	Form of Non-Qualified Stock Option Agreement for the Purchase of Stock under the Stock Plan		8-K		99.3	5/22/2008
10.11	*	Form of Incentive Stock Option Agreement for the Purchase of Stock under the Stock Plan		8-K		99.4	5/22/2008
10.12	*	Amendment to Non-Qualified Stock Option Agreements for John A. Rife		8-K/A		99.1	2/24/2009
10.13	*	Form of Restricted Stock Agreement Under the 2005 Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan		10-K	12/31/2011	10.14	3/15/2012
10.14	*	Form Restricted Stock Agreement Under the 2005 Non-Qualified Non-Employee Director Stock Option Plan (as amended)		10-Q	6/30/2016	10.1	8/3/2016
10.14	*	United Fire Group, Inc. Plan for Allocation of Equity Compensation to Management Team		10-K	12/31/2011	10.15	3/15/2012
10.15	*	Deferred Compensation Plan for United Fire Group, Inc. Non-Employee Directors		8-K		10.1	11/19/2012

*Indicates a management contract or compensatory plan or arrangement.

† The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The registrant agrees to furnish a copy of all omitted schedules to the Securities and Exchange Commission upon its request.

156

(a) 3. Exhibit Index (continued):

				Incorporated by reference
Exhibit number		Exhibit description	Filed herewith	Form	Period ending	Exhibit	Filing date
10.16	*	United Fire Group, Inc. Executive Nonqualified Excess Plan		8-K		10.1	5/22/2014
10.17	*	United Fire & Casualty Company Executive Nonqualified Excess Plan Adoption Agreement		8-K		10.2	5/22/2014
10.18	*	United Fire & Casualty Company Rabbi Directed Trust Agreement		8-K		10.3	5/22/2014
10.19	*	Form of United Fire Group, Inc. Change in Control Severance Agreement		8-K		10.4	5/22/2014
10.20	*	Amendment Number One to United Fire & Casualty Company Nonqualified Deferred Compensation Plan		8-K		10.5	5/22/2014
10.21	*	Form of Non-Qualified Employee Stock Option Agreement under the Stock Plan, Defined as 2008 Plan, as Amended		10-Q	6/30/14	10.7	8/5/2014
10.22	*	Form of Stock Award Agreement under the United Fire Group, Inc. Stock Plan		10-Q	6/30/14	10.8	8/5/2014
10.23	*	Form of Stock Award Agreement ( Restricted Stock Units-Performance Units) Under the Stock Plan		10-Q	3/31/17	10.1	5/3/2017
10.24		Credit Agreement dated as of February 2, 2016, by and among United Fire Group, Inc., as borrower, the lenders from time to time party thereto, and KeyBank National Association, as administrative agent, swingline lender and letter of credit issuer.		8-K		10.1	2/5/2016
11		Statement Re Computation of Per Share Earnings. All information required by Exhibit 11 is presented within Note 12 of the Notes to Consolidated Financial Statements	X
12		Statement Re Computation of Ratios	X
21		Subsidiaries of the Registrant	X
23.1		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm	X
23.2		Consent of Griffith, Ballard & Company, Independent Actuary	X
23.3		Consent of Regnier Consulting Group, Inc., Independent Actuary	X

*Indicates a management contract or compensatory plan or arrangement.

157

(a) 3. Exhibit Index (continued):

			Incorporated by reference
Exhibit number	Exhibit description	Filed herewith	Form	Period ending	Exhibit	Filing date
31.1	Certification of Randy A. Ramlo Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of Dawn M. Jaffray Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1	Certification of Randy A. Ramlo Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2	Certification of Dawn M. Jaffray Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.1	The following financial information from United Fire Group, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017 formatted in XBRL: (i) Consolidated Balance Sheets at December 31, 2017 and 2016; (ii) Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2017, 2016 and 2015; (iii) Consolidated Statement of Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015; and (v) Notes to Consolidated Financial Statements.	X

158

Schedule I. Summary of Investments — Other than Investments in Related Parties

Continuing Operations:

December 31, 2017	(In thousands)
	Cost or Amortized Cost				Amounts at Which Shown in Balance Sheet
Type of Investment			Fair Value
Fixed maturities
Bonds
United States Government and government agencies and authorities	$	94,941	$	95,353	$	95,353
States, municipalities and political subdivisions	1,019,420		1,034,827		1,034,827
Foreign governments	10,865		11,130		11,130
Public utilities	43,064		43,692		43,692
All other bonds	360,657		364,501		364,501
Redeemable preferred stock	2,395		2,559		2,559
Total fixed maturities	$	1,531,342	$	1,552,062	$	1,552,062
Equity securities
Common stocks
Public utilities	$	4,661	$	16,060	$	16,060
Banks, trusts and insurance companies	11,266		113,487		113,487
Industrial, miscellaneous and all other	44,077		153,959		153,959
Nonredeemable preferred stocks	3,271		3,838		3,838
Total equity securities	$	63,275	$	287,344	$	287,344
Other long-term investments	35,432		49,352		49,352
Short-term investments	175		175		175
Total investments	$	1,630,224	$	1,888,933	$	1,888,933

159

Discontinued Operations:

December 31, 2017	(In thousands)
	Cost or Amortized Cost				Amounts at Which Shown in Balance Sheet
Type of Investment			Fair Value
Fixed maturities
Bonds
United States Government and government agencies and authorities	$	43,706	$	43,706	$	43,706
States, municipalities and political subdivisions	37,963		38,363		38,363
Foreign governments	40,496		41,623		41,623
Public utilities	162,964		165,452		165,452
All other bonds	1,127,196		1,140,915		1,140,915
Total fixed maturities	$	1,412,325	$	1,430,059	$	1,430,059
Equity securities
Common stocks
Public utilities	$	2,544	$	7,253	$	7,253
Banks, trusts and insurance companies	467		3,158		3,158
Industrial, miscellaneous and all other	2,088		13,242		13,242
Total equity securities	$	5,099	$	23,653	$	23,653
Mortgage loans on real estate	$	3,435	$	3,594	$	3,435
Policy loans	5,815		5,815		5,815
Other long-term investments	14,077		16,437		16,437
Total investments	$	1,440,751	$	1,479,558	$	1,479,399

160

Schedule II. Condensed Financial Statements of Parent Company

United Fire Group, Inc. (parent company only)

Condensed Balance Sheets

	December 31,
(In thousands, except share data)	2017		2016
Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $150 in 2017 and $150 in 2016)	$	150	$	150
Investment in subsidiary	967,590		925,887
Cash and cash equivalents	4,537		14,325
Federal income tax receivable	1,095		1,521
Accrued investment income	1		1
Total assets	$	973,373	$	941,884
Liabilities and stockholders' equity
Liabilities	$	—	$	—
Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 24,916,806 and 25,429,769 issued and outstanding in 2017 and 2016, respectively	$	25	$	25
Additional paid-in capital	196,334		216,482
Retained earnings	608,700		616,322
Accumulated other comprehensive income, net of tax	168,314		109,055
Total stockholders' equity	$	973,373	$	941,884
Total liabilities and stockholders' equity	$	973,373	$	941,884

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Annual Report on Form 10-K.

161

Schedule II. Condensed Financial Statements of Parent Company (continued)

United Fire Group, Inc. (parent company only)

Condensed Statements of Income and Comprehensive Income

	For the Years Ended December 31,
(In thousands)	2017			2016			2015
Revenues
Investment income	$	133		$	66		$	25
Total revenues	133			66			25
Expenses
Other operating expenses	$	103		$	73		$	116
Total expenses	103			73			116
Income (loss) before income taxes and equity in net income of subsidiary	30			(7		)	(91		)
Federal income tax benefit	(1,060		)	(3		)	(42		)
Net income (loss) before equity in net income of subsidiary	$	1,090		$	(4	)	$	(49	)
Equity in net income of subsidiary	49,933			49,908			89,175
Net income	$	51,023		$	49,904		$	89,126
Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary	$	72,251		$	13,017		$	(28,185	)
Change in liability for underfunded employee benefit plans of subsidiary	(26,122		)	30,045			8,714
Other comprehensive income (loss), before tax and reclassification adjustments	$	46,129		$	43,062		$	(19,471	)
Income tax effect	(17,540		)	(15,072		)	6,814
Other comprehensive income (loss), after tax, before reclassification adjustments	$	28,589		$	27,990		$	(12,657	)
Reclassification adjustment for net realized gains of the subsidiary included in income	(6,390		)	(4,520		)	(4,513		)
Reclassification adjustment for employee benefit costs of the subsidiary included in expense	5,408			5,486			7,468
Total reclassification adjustments, before tax	$	(982	)	$	966		$	2,955
Income tax effect	344			(338		)	(1,034		)
Total reclassification adjustments, after tax	$	(638	)	$	628		$	1,921
Comprehensive income	$	78,974		$	78,522		$	78,390

United Fire Group, Inc. and its subsidiaries file a consolidated federal income tax return. The federal income tax provision represents an allocation under its tax allocation agreements.

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Annual Report on Form 10-K.

162

Schedule II. Condensed Financial Statements of Parent Company (continued)

United Fire Group, Inc. (parent company only)

Condensed Statements of Cash Flows

	For the Years Ended December 31,
(In thousands)	2017			2016			2015
Cash flows from operating activities
Net income	$	51,023		$	49,904		$	89,126
Adjustments to reconcile net income to net cash provided by operating activities
Equity in net income of subsidiary	(49,933		)	(49,908		)	(89,175		)
Dividends received from subsidiary	40,000			24,000			22,500
Other, net	1,415			2,995			1,269
Total adjustments	$	(8,518	)	$	(22,913	)	$	(65,406	)
Net cash provided by operating activities	$	42,505		$	26,991		$	23,720
Cash flows from investing activities
Proceeds from maturity of held-to-maturity investments	$	150		$	—		$	—
Purchase of held-to-maturity investments	(150		)	—			—
Net cash used in investing activities	$	—		$	—		$	—
Cash flows from financing activities
Payment of cash dividends	$	(27,337	)	$	(24,591	)	$	(21,658	)
Repurchase of common stock	(29,784		)	(3,746		)	(2,423		)
Issuance of common stock	4,828			9,922			5,496
Tax impact from issuance of common stock	—			(816		)	(833		)
Net cash used in financing activities	$	(52,293	)	$	(19,231	)	$	(19,418	)
Net change in cash and cash equivalents	$	(9,788	)	$	7,760		$	4,302
Cash and cash equivalents at beginning of period	14,325			6,565			2,263
Cash and cash equivalents at end of year	$	4,537		$	14,325		$	6,565

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Form 10-K.

163

Schedule III. Supplementary Insurance Information

(In thousands)	Deferred Policy Acquisition Costs		Future Policy Benefits, Losses, Claims and Loss Expenses		Unearned Premiums		Earned Premium Revenue		Investment Income, Net		Benefits, Claims, Losses and Settlement Expenses		Amortization of Deferred Policy Acquisition Costs		Other Underwriting Expenses		Interest on Policyholders' Accounts		Premiums Written (2)
Year Ended December 31, 2017
Continuing Operations	$	88,102	$	1,224,183	$	465,391	$	997,492	$	51,190	$	725,713	$	207,746	$	103,628	$	—	$	1,019,113
Discontinued Operations(1)	71,151		1,320,401		67		61,368		49,720		68,083		5,181		13,281		18,525		—
Total	$	159,253	$	2,544,584	$	465,458	$	1,058,860	$	100,910	$	793,796	$	212,927	$	116,909	$	18,525	$	1,019,113
Year Ended December 31, 2016
Continuing Operations	$	93,362	$	1,123,896	$	443,802	$	936,131	$	55,284	$	652,433	$	202,892	$	83,540	$	—	$	964,970
Discontinued Operations(1)	70,750		1,350,503		71		87,270		51,538		91,334		8,121		19,881		20,079		—
Total	$	164,112	$	2,474,399	$	443,873	$	1,023,401	$	106,822	$	743,767	$	211,013	$	103,421	$	20,079	$	964,970
Year Ended December 31, 2015
Continuing Operations	$	90,547	$	1,003,895	$	414,971	$	851,695	$	46,559	$	520,087	$	180,183	$	83,631	$	—	$	887,874
Discontinued Operations(1)	77,717		1,372,358		86		79,195		54,222		79,946		6,634		19,306		23,680		—
Total	$	168,264	$	2,376,253	$	415,057	$	930,890	$	100,781	$	600,033	$	186,817	$	102,937	$	23,680	$	887,874

(1) Annuity deposits are included in future policy benefits, losses, claims and loss expenses.

(2) Pursuant to Regulation S-X, premiums written does not apply to life insurance companies.

164

Schedule IV. Reinsurance

(In thousands)	Gross Amount		Ceded to Other Companies		Assumed From Other Companies		Net Amount		Percentage of Amount Assumed to Net Earned
Year Ended December 31, 2017
Life insurance in force	$	5,309,508	$	1,014,794	$	—	$	4,294,714
Premiums earned
Continuing Operations - Property and casualty insurance	$	1,043,738	$	61,305	$	15,059	$	997,492	1.51	%
Discontinued Operations - Life, accident and health insurance	64,090		2,722		—		61,368		—	%
Total	$	1,107,828	$	64,027	$	15,059	$	1,058,860	1.42	%
Year Ended December 31, 2016
Life insurance in force	$	5,314,548	$	1,023,197	$	—	$	4,291,351
Premiums earned
Continuing Operations - Property and casualty insurance	$	977,090	$	57,996	$	17,037	$	936,131	1.82	%
Discontinued Operations - Life, accident and health insurance	90,038		2,768		—		87,270		—	%
Total	$	1,067,128	$	60,764	$	17,037	$	1,023,401	1.66	%
Year Ended December 31, 2015
Life insurance in force	$	5,491,932	$	1,165,868	$	—	$	4,326,064
Premiums earned
Continuing Operations - Property and casualty insurance	$	890,057	$	56,758	$	18,396	$	851,695	2.16	%
Discontinued Operations - Life, accident and health insurance	82,356		3,161		—		79,195		—	%
Total	$	972,413	$	59,919	$	18,396	$	930,890	1.98	%

165

Schedule V. Valuation And Qualifying Accounts

(In thousands)	Balance at beginning of period		Charged to costs and expenses		Deductions		Balance at end of period
Description
Allowance for bad debts
Year Ended December 31, 2017	$	1,255	$	—	$	—	$	1,255
Year Ended December 31, 2016	867		388		—		1,255
Year Ended December 31, 2015	618		249		—		867
Deferred tax asset valuation allowance (1)
Year Ended December 31, 2017	$	718	$	—	$	389	$	329
Year Ended December 31, 2016	1,265		—		547		718
Year Ended December 31, 2015	1,813		—		548		1,265

(1) Recorded in connection with the purchase of American Indemnity Financial Corporation in 1999.

166

Schedule VI. Supplemental Information Concerning Property and Casualty Insurance Operations

(In thousands)
Affiliation with Registrant: United Fire & Casualty Company and consolidated property and casualty subsidiaries													Claims and Claim Adjustment Expenses Incurred Related to:						Amortization of Deferred Policy Acquisition Costs (1)
			Reserves for Unpaid Claims and Claim Adjustment Expenses						Net Realized Investment Gains
	Deferred Policy Acquisition Costs										Net Investment Income										Paid Claims and Claim Adjustment Expenses
					Unearned Premiums		Earned Premiums						Current Year			Prior Years							Premiums Written
2017	$	88,102	$	1,224,183	$	465,391	$	997,492	$	4,055	$	51,190	$	(779,966	)	$	(54,253	)	$	207,746	$	625,503	$	1,019,113
2016	$	93,362	$	1,123,896	$	443,802	$	936,131	$	4,947	$	55,284	$	683,662		$	(31,229	)	$	202,892	$	537,573	$	964,970
2015	$	90,547	$	1,003,895	$	414,971	$	851,695	$	1,124	$	46,559	$	560,482		$	(40,395	)	$	180,183	$	476,525	$	887,874

167

ITEM 16. FORM 10-K SUMMARY

None.

168

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNITED FIRE GROUP, INC.

By:	/s/ Randy A. Ramlo
	Randy A. Ramlo, Chief Executive Officer, Director and Principal Executive Officer
Date:	2/28/2018
By:	/s/ Dawn M. Jaffray
	Dawn M. Jaffray, Senior Vice President, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer
Date:	2/28/2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By	/s/ Jack B. Evans	By	/s/ John Paul E. Besong
	Jack B. Evans, Chairman and Director		John Paul E. Besong, Director
Date	2/28/2018	Date	2/28/2018
By	/s/ Scott L. Carlton	By:	/s/ Brenda K. Clancy
	Scott L. Carlton, Director		Brenda K. Clancy, Director
Date	2/28/2018	Date	2/28/2018
By	/s/ Christopher R. Drahozal	By	/s/ Sarah Fisher Gardial
	Christopher R. Drahozal, Director		Sarah Fisher Gardial, Director
Date	2/28/2018	Date	2/28/2018
By	/s/ Dawn M. Jaffray	By	/s/ George D. Milligan
	Dawn M. Jaffray, Senior Vice President, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer		George D. Milligan, Director
Date	2/28/2018	Date	2/28/2018
By	/s/ James W. Noyce	By	/s/ Mary K. Quass
	James W. Noyce, Vice Chairman and Director		Mary K. Quass, Director
Date	2/28/2018	Date	2/28/2018
By	/s/ Randy A. Ramlo	By	/s/ Kyle D. Skogman
	Randy A. Ramlo, Chief Executive Officer, Director and Principal Executive Officer		Kyle D. Skogman, Director
Date	2/28/2018	Date	2/28/2018
By	/s/ Susan E. Voss
	Susan E. Voss, Director
Date	2/28/2018

169

EX-12

EXHIBIT 12. COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

(In Thousands)
Years ended December 31	2017		2016		2015		2014		2013
Earnings
Consolidated income before income taxes(1)	$	26,293	$	58,667	$	121,451	$	76,463	$	101,902
Add: fixed charges	19,956		21,461		24,931		31,653		36,467
Total earnings	$	46,249	$	80,128	$	146,382	$	108,116	$	138,369
Fixed charges
Interest on policyholders’ accounts	$	18,525	$	20,079	$	23,680	$	30,245	$	35,163
Portion of rent representative of interest factor	1,431		1,382		1,251		1,408		1,304
Total fixed charges	$	19,956	$	21,461	$	24,931	$	31,653	$	36,467
Ratio of earnings to fixed charges	2.32		3.73		5.87		3.42		3.79

(1) Includes Income before income taxes from both continuing operations and discontinued operations.

EX-21

EXHIBIT 21. SUBSIDIARIES OF THE REGISTRANT

Subsidiary	Jurisdiction of Organization	% of Ownership by United Fire Group, Inc. or one of its Subsidiaries
United Fire & Casualty Company	Iowa	100% owned by United Fire Group, Inc.
United Life Insurance Company	Iowa	100% owned by United Fire & Casualty Company
Addison Insurance Company	Iowa	100% owned by United Fire & Casualty Company
UFG Specialty Insurance Company	Iowa	100% owned by United Fire & Casualty Company
Lafayette Insurance Company	Louisiana	100% owned by United Fire & Casualty Company
Financial Pacific Insurance Company	California	100% owned by United Fire & Casualty Company
Mercer Insurance Company	Pennsylvania	100% owned by United Fire & Casualty Company
Franklin Insurance Company	Pennsylvania	100% owned by Mercer Insurance Company
Mercer Insurance Company of New Jersey, Inc.	New Jersey	100% owned by Mercer Insurance Company
United Fire & Indemnity Company	Texas	100% owned by United Fire & Casualty Company
United Fire Lloyds	Texas	Operationally and financially controlled by United Fire & Indemnity Company, its Corporate Attorney-in-Fact
United Real Estate Holdings, LLC	Iowa	Single-member LLC 100% owned by United Fire & Casualty Company

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements of United Fire Group, Inc. described in the following table of our reports dated February 28, 2018, with respect to the consolidated financial statements and schedules of United Fire Group, Inc. and the effectiveness of internal control over financial reporting of United Fire Group, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2017.

Registration Statement
Form	Number	Purpose
S-8	333-42895	Pertaining to United Fire's employee stock purchase plan
S-8	333-63103	Pertaining to United Fire's non-qualified employee stock option plan
S-8	333-107041	Pertaining to the United Fire Group 401(k) plan
S-8	333-129923/ 333-178095	Pertaining to United Fire's 2005 non-qualified non-employee director stock option and restricted stock plan
S-8	333-151074/ 333-196251	Pertaining to United Fire's Stock Plan

/s/ Ernst & Young LLP

Ernst & Young LLP

Des Moines, Iowa

February 28, 2018

EX-23.2

EXHIBIT 23.2

Consent of Independent Actuary

We consent to the use of and reference to our name in the Annual Report on Form 10-K of United Fire Group, Inc. (“United Fire”) for the year ended December 31, 2017 in Item 1, “Business” under the heading “Reserves” under the subheading “Discontinued Operations - Life Insurance Business” and in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the subheading “Critical Accounting Policies” under the heading “Independent Actuary” under “Future Policy Benefits and Losses, Claims and Loss Settlement Expenses - Discontinued Opeartions.” We also consent to the incorporation by reference of such use and reference into the Registration Statements of United Fire described in the following table:

Registration Statement
Form	Number	Purpose
S-8	333-42895	Pertaining to United Fire's employee stock purchase plan
S-8	333-63103	Pertaining to United Fire's non-qualified employee stock option plan
S-8	333-107041	Pertaining to the United Fire Group 401(k) plan
S-8	333-129923/ 333-178095	Pertaining to United Fire's 2005 non-qualified non-employee director stock option and restricted stock plan
S-8	333-151074/ 333-196251	Pertaining to United Fire's Stock Plan

February 28, 2018	/s/ Steve Griffith
	Griffith, Ballard and Company
	President

EX-23.3

EXHIBIT 23.3

Consent of Independent Actuary

We consent to the use of and reference to our name in the Annual Report on Form 10-K of United Fire Group, Inc. (“United Fire”) for the year ended December 31, 2017 in Item 1. “Business” under the heading “Reserves” under the subheading “Continuing Operations - Property and Casualty Insurance Business” and Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Critical Accounting Policies” under the subheadings “Incurred But Not Reported (IBNR) Reserves” and “Independent Actuary” under “Loss and Loss Settlement Expenses - Continuing Operations.” We also consent to the incorporation by reference of such use and reference into the Registration Statements of United Fire described in the following table:

Registration Statement
Form	Number	Purpose
S-8	333-42895	Pertaining to United Fire's employee stock purchase plan
S-8	333-63103	Pertaining to United Fire's non-qualified employee stock option plan
S-8	333-107041	Pertaining to the United Fire Group 401(k) plan
S-8	333-129923/ 333-178095	Pertaining to United Fire's 2005 non-qualified non-employee director stock option and restricted stock plan
S-8	333-151074/ 333-196251	Pertaining to United Fire's Stock Plan

February 28, 2018	/s/ Steven J. Regnier
	Regnier Consulting Group, Inc.
	Steven J. Regnier, President

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Randy A. Ramlo, certify that:

1. I have reviewed this annual report on Form 10-K of United Fire Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	February 28, 2018
		/s/ Randy A. Ramlo
		Randy A. Ramlo
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dawn M. Jaffray, certify that:

1. I have reviewed this annual report on Form 10-K of United Fire Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	February 28, 2018
		/s/ Dawn M. Jaffray
		Dawn M. Jaffray
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of United Fire Group, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Randy A. Ramlo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	February 28, 2018
		/s/ Randy A. Ramlo
		Randy A. Ramlo
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to United Fire Group, Inc. and will be retained by United Fire Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of United Fire Group, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dawn M. Jaffray, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	February 28, 2018
		/s/ Dawn M. Jaffray
		Dawn M. Jaffray
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to United Fire Group, Inc. and will be retained by United Fire Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2017	Feb. 26, 2018	Jun. 30, 2017
Document and Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	UFCS
Entity Registrant Name	UNITED FIRE GROUP INC
Entity Central Index Key	0000101199
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding (in shares)		24,912,137
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 1.0

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fixed maturities
Held-to-maturity, at amortized cost (fair value $150 in 2017 and $150 in 2016)	$ 150	$ 150
Available-for-sale, at fair value (amortized cost $1,516,610 in 2017 and $1,458,235 in 2016)	1,535,070	1,453,286
Trading securities, at fair value (amortized cost $14,582 in 2017 and $13,054 in 2016)	16,842	14,390
Equity securities
Available-for-sale, at fair value (cost $57,387 in 2017 and $59,994 in 2016)	280,913	246,370
Trading securities, at fair value (cost $5,888 in 2017 and $5,434 in 2016)	6,431	5,644
Other long-term investments	49,352	51,769
Short-term investments	175	175
Total Investments	1,888,933	1,771,784
Cash and cash equivalents	95,562	89,194
Accrued investment income	13,841	13,617
Premiums receivable (net of allowance for doubtful accounts of $1,255 in 2017 and $1,255 in 2016)	328,513	306,202
Deferred policy acquisition costs	88,102	93,362
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $51,603 in 2017 and $50,925 in 2016)	68,992	55,524
Reinsurance receivables and recoverables	63,194	62,707
Prepaid reinsurance premiums	3,749	3,782
Income taxes receivable	6,031	14,285
Goodwill and net intangible assets	23,971	24,740
Other assets	16,409	13,943
Assets held for sale	1,586,134	1,605,618
Total assets	4,183,431	4,054,758
Liabilities
Losses and loss settlement expenses	1,224,183	1,123,896
Unearned premiums	465,391	443,802
Accrued expenses and other liabilities	167,396	147,104
Deferred income taxes	5,953	7,849
Liabilities held for sale	1,347,135	1,390,223
Total liabilities	3,210,058	3,112,874
Stockholders' equity
Common stock, $0.001 par value; authorized 75,000,000 shares; 24,916,806 and 25,429,769 shares issued and outstanding in 2017 and 2016, respectively	25	25
Additional paid-in capital	196,334	216,482
Retained earnings	608,700	616,322
Accumulated other comprehensive income, net of tax	168,314	109,055
Total stockholders' equity	973,373	941,884
Total liabilities and stockholders' equity	$ 4,183,431	$ 4,054,758

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Fixed maturities, Held-to-maturity, at fair value	$ 150	$ 150
Fixed maturities, Available-for-sale securities, at amortized cost	1,516,610	1,458,235
Fixed maturities, Trading securities, at amortized cost	14,582	13,054
Equity securities, Available-for-sale securities, at amortized cost	57,387	59,994
Equity securities, Trading securities, at amortized cost	5,888	5,434
Allowance for doubtful accounts	1,255	1,255
Property and equipment, accumulated depreciation	$ 51,603	$ 50,925
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	24,916,806	25,429,769
Common stock, shares outstanding (in shares)	24,916,806	25,429,769

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Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues
Net premiums earned	$ 997,492	$ 936,131	$ 851,695
Investment income, net of investment expenses	51,190	55,284	46,559
Net realized investment gains (includes reclassifications for net unrealized gains on available-for-sale securities of $6,390 in 2017; $4,520 in 2016; and $4,513 in 2015 previously included in accumulated other comprehensive income)	4,055	4,947	1,124
Other income (loss)	0	0	(107)
Total revenues	1,052,737	996,362	899,271
Benefits, losses and expenses
Losses and loss settlement expenses	725,713	652,433	520,087
Amortization of deferred policy acquisition costs	207,746	202,892	180,183
Other underwriting expenses (includes reclassifications for employee benefit costs of $5,408 in 2017; $5,486 in 2016; and $7,468 in 2015 previously included in accumulated other comprehensive income)	103,628	83,540	83,631
Total benefits, losses and expenses	1,037,087	938,865	783,901
Income from continuing operations before income taxes	15,650	57,497	115,370
Federal income tax expense (benefit) (includes reclassifications of ($344) in 2017; $338 in 2016; and $1,034 in 2015 previously included in accumulated other comprehensive income)	(29,220)	8,379	30,050
Net income from continuing operations	44,870	49,118	85,320
Income from discontinued operations, net of taxes	6,153	786	3,806
Net income	51,023	49,904	89,126
Other comprehensive income (loss)
Change in net unrealized appreciation on investments	72,251	13,017	(28,185)
Change in liability for underfunded employee benefit plans	(26,122)	30,045	8,714
Other comprehensive income (loss), before tax and reclassification adjustments	46,129	43,062	(19,471)
Income tax effect	(17,540)	(15,072)	6,814
Other comprehensive income (loss), after tax, before reclassification adjustments	28,589	27,990	(12,657)
Reclassification adjustment for net realized gains included in income	(6,390)	(4,520)	(4,513)
Reclassification adjustment for employee benefit costs included in expense	5,408	5,486	7,468
Total reclassification adjustments, before tax	(982)	966	2,955
Income tax effect	344	(338)	(1,034)
Total reclassification adjustments, after tax	(638)	628	1,921
Comprehensive income	$ 78,974	$ 78,522	$ 78,390
Weighted average common shares outstanding (in shares)	25,103,720	25,335,706	25,047,405
Earnings per common share from continuing operations:
Basic (in dollars per share)	$ 1.79	$ 1.94	$ 3.41
Diluted (in dollars per share)	1.75	1.90	3.38
Earnings per common share:
Basic (in dollars per share)	2.03	1.97	3.56
Diluted (in dollars per share)	$ 1.99	$ 1.93	$ 3.53

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Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Reclassifications for unrealized net gains on available-for-sale securities	$ 6,390	$ 4,520	$ 4,513
Reclassification adjustment for employee benefit costs	5,408	5,486	7,468
Income tax effect	$ (344)	$ 338	$ 1,034

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Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands		Total	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income, net of tax
Balance, beginning of year at Dec. 31, 2014		$ 817,415	$ 25	$ 202,676	$ 523,541	$ 91,173
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares repurchased			0	(2,423)
Shares issued for stock-based awards			0	5,496
Compensation expense and related tax benefit for stock-based award grants				1,677
Net income		89,126			89,126
Accumulated effect of change in enacted tax rate					0	0
Dividends on common stock ($1.09 per share in 2017; $0.97 per share in 2016; $0.86 per share in 2015)					(21,658)
Change in net unrealized investment appreciation	[1]					(21,254)
Change in liability for underfunded employee benefit plans	[2]					10,518
All other changes in stockholders' equity accounts		(27,644)
Balance, end of year at Dec. 31, 2015		878,897	25	207,426	591,009	80,437
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares repurchased			0	(3,746)
Shares issued for stock-based awards			0	9,922
Compensation expense and related tax benefit for stock-based award grants				2,880
Net income		49,904			49,904
Accumulated effect of change in enacted tax rate					0	0
Dividends on common stock ($1.09 per share in 2017; $0.97 per share in 2016; $0.86 per share in 2015)					(24,591)
Change in net unrealized investment appreciation	[1]					5,523
Change in liability for underfunded employee benefit plans	[2]					23,095
All other changes in stockholders' equity accounts		13,083
Balance, end of year at Dec. 31, 2016		941,884	25	216,482	616,322	109,055
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares repurchased			0	(29,784)
Shares issued for stock-based awards			0	4,828
Compensation expense and related tax benefit for stock-based award grants				4,808
Net income		51,023			51,023
Accumulated effect of change in enacted tax rate		31,308			(31,308)	31,308
Dividends on common stock ($1.09 per share in 2017; $0.97 per share in 2016; $0.86 per share in 2015)					(27,337)
Change in net unrealized investment appreciation	[1]					44,315
Change in liability for underfunded employee benefit plans	[2]					(16,364)
All other changes in stockholders' equity accounts		(19,534)
Balance, end of year at Dec. 31, 2017		$ 973,373	$ 25	$ 196,334	$ 608,700	$ 168,314

[1] The change in net unrealized appreciation is net of reclassification adjustments and income taxes.

[2] The change in liability for underfunded employee benefit plans is net of income taxes.

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Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]
Shares repurchased (in shares)	701,899	90,415	79,396
Shares issued for stock-based awards (in shares)	198,694	376,142	202,882
Dividends on common stock (in dollars per share)	$ 1.09	$ 0.97	$ 0.86

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash Flows From Operating Activities
Net income	$ 51,023	$ 49,904	$ 89,126
Less net income from discontinued operations, net of taxes	6,153	786	3,806
Adjustments to reconcile net income to net cash provided by operating activities
Net accretion of bond premium	8,872	7,049	5,420
Depreciation and amortization	4,574	6,035	6,473
Stock-based compensation expense	4,808	3,696	2,510
Net realized investment gains	(4,055)	(4,947)	(1,124)
Net cash flows from trading investments	(1,909)	(2,390)	3,080
Deferred income tax expense (benefit)	(5,921)	3,331	(5,574)
Changes in:
Accrued investment income	(224)	(874)	(363)
Premiums receivable	(22,311)	(29,685)	(27,487)
Deferred policy acquisition costs	5,260	(2,815)	(17,686)
Reinsurance receivables	(487)	4,206	12,609
Prepaid reinsurance premiums	33	8	(158)
Income taxes receivable	8,254	(14,285)	0
Other assets	(2,465)	758	(1,097)
Losses, claims and loss settlement expenses	100,287	120,001	34,458
Unearned premiums	21,589	28,830	36,336
Accrued expenses and other liabilities	(423)	(7,605)	16,470
Income taxes payable	0	(5,365)	66
Deferred income taxes	(25,883)	1,495	(858)
Other, net	3,378	(9,943)	(2,914)
Cash from operating activities - continuing operations	93,377	97,500	60,161
Cash from operating activities - discontinued operations	31,847	67,766	44,518
Total adjustments	125,224	165,266	104,679
Net cash provided by operating activities	170,094	214,384	189,999
Cash Flows From Investing Activities
Proceeds from sale of available-for-sale investments	7,404	1,968	478
Proceeds from call and maturity of held-to-maturity investments	150	493	105
Proceeds from call and maturity of available-for-sale investments	191,521	323,653	247,692
Proceeds from short-term and other investments	6,032	1,947	3,881
Purchase of held-to-maturity investments	(150)	(42)	(450)
Purchase of available-for-sale investments	(260,957)	(443,953)	(355,192)
Purchase of short-term and other investments	(6,428)	(4,155)	(5,103)
Net purchases and sales of property and equipment	(17,158)	(7,600)	(9,696)
Cash from investing activities - continuing operations	(79,586)	(127,689)	(118,285)
Cash from investing activities - discontinued operations	17,601	15,286	81,999
Net cash used in investing activities	(61,985)	(112,403)	(36,286)
Cash Flows From Financing Activities
Payment of cash dividends	(27,337)	(24,591)	(21,658)
Dividends from discontinued operations	0	0	15,000
Repurchase of common stock	(29,784)	(3,746)	(2,423)
Issuance of common stock	4,828	9,922	5,496
Tax impact from issuance of common stock	0	(816)	(833)
Cash from financing activities - continued operations	(52,293)	(19,231)	(4,418)
Cash from financing activities - discontinued operations	(55,256)	(78,346)	(133,419)
Net cash used in financing activities	(107,549)	(97,577)	(137,837)
Net Change in Cash and Cash Equivalents	560	4,404	15,876
Less: decrease (increase) in cash and cash equivalents - discontinued operations	5,808	(4,706)	6,902
Net increase (decrease) in cash and cash equivalents - continuing operations	6,368	(302)	22,778
Cash and Cash Equivalents at Beginning of Year - Continuing Operations	89,194	89,496	66,718
Cash and Cash Equivalents at End of Year - Continuing Operations	$ 95,562	$ 89,194	$ 89,496

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

United Fire Group, Inc. ("UFG", "United Fire", the "Registrant", the "Company","we", "us", or "our") and its consolidated subsidiaries and affiliates are engaged in the business of writing property and casualty insurance and life insurance and selling annuities through a network of independent agencies. Our insurance company subsidiaries are licensed as a property and casualty insurer in 46 states, plus the District of Columbia, and as a life insurer in 37 states.

Discontinued Operations

We have historically reported our operations in two business segments: property and casualty insurance and life insurance. On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company ("United Life"), to Kuvare US Holdings, Inc. ("Kuvare"). As a result, our life insurance business, previously a separate segment, has been considered held for sale and reported as discontinued operations in the Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income and Consolidated Statements of Cash Flows (collectively, the "Consolidated Financial Statements"). Subsequent to the announcement of this sale, our continuing operations are now reported as one business segment. All current and prior periods reflected in this Form 10-K have been presented as continuing and discontinued operations, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval. For more information, refer to Note 17 "Discontinued Operations."

Principles of Consolidation

The accompanying Consolidated Financial Statements include United Fire and its wholly owned subsidiaries: United Fire & Casualty Company, United Real Estate Holdings Company, LLC, United Life, Addison Insurance Company, Lafayette Insurance Company, United Fire & Indemnity Company, United Fire Lloyds, UFG Specialty Insurance Company, Financial Pacific Insurance Company, Franklin Insurance Company, Mercer Insurance Company, and Mercer Insurance Company of New Jersey, Inc.

United Fire Lloyds, an affiliate of United Fire & Indemnity Company, is organized as a Texas Lloyds plan, which is an aggregation of underwriters who, under a common name, engage in the business of insurance through a corporate attorney-in-fact. United Fire Lloyds is financially and operationally controlled by United Fire & Indemnity Company, its corporate attorney-in-fact, pursuant to three types of agreements: trust agreements between United Fire & Indemnity Company and certain individuals who agree to serve as trustees; articles of agreement among the trustees who agree to act as underwriters to establish how the Lloyds plan will be operated; and powers of attorney from each of the underwriters appointing a corporate attorney-in-fact, who is authorized to operate the Lloyds plan. Because United Fire & Indemnity Company can name the trustees, the Lloyds plan is perpetual, subject only to United Fire & Indemnity Company's desire to terminate it.

United Fire & Indemnity Company provides all of the statutory capital necessary for the formation of the Lloyds plan by contributing capital to each of the trustees. The trust agreements require the trustees to become underwriters of the Lloyds plan, to contribute the capital to the Lloyds plan, to sign the articles of agreement and to appoint the attorney-in-fact. The trust agreements also require the trustees to pay to United Fire & Indemnity Company all of the profits and benefits received by the trustees as underwriters of the Lloyds plan, which means that United Fire & Indemnity Company has the right to receive 100 percent of the gains and profits from the Lloyds plan. The trustees serve at the pleasure of United Fire & Indemnity Company, which may remove a trustee and replace that trustee at any time. Termination of a trustee must be accompanied by the resignation of the trustee as an underwriter, so that the trustee can obtain the capital contribution from the Lloyds plan to reimburse United Fire & Indemnity Company. By retaining the ability to terminate trustees, United Fire & Indemnity Company possesses the ability to name and remove the underwriters.

United Real Estate Holdings, LLC, formed in 2013, is a wholly owned subsidiary of United Fire & Casualty Company and is organized as an Iowa limited liability corporation, an unincorporated association formed for the purpose of holding United Fire & Casualty Company's ownership in commercial real estate.

In 2015, the Company dissolved three of its holding companies in order to flatten our organizational chart. The companies dissolved were American Indemnity Financial Corporation, Mercer Insurance Group, Inc. and Financial Pacific Insurance Group, Inc. In addition, Texas General Indemnity Company was renamed UFG Specialty Insurance Company on July 1, 2015.

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP"), which differ in some respects from those followed in preparing our statutory reports to insurance regulatory authorities. Our stand-alone subsidiary financial statements submitted to insurance regulatory authorities are presented on the basis of accounting practices prescribed or permitted by the insurance departments of the states in which we are domiciled ("statutory accounting principles").

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; future policy benefits and losses, claims and loss settlement expenses; and pension and post-retirement benefit obligations.

Continuing Operations - Property and Casualty Insurance Business

Premiums written are deferred and recorded as earned premium on a daily pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policies in force. Premiums receivable are presented net of an estimated allowance for doubtful accounts, which is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders.

To establish loss and loss settlement expense reserves, we make estimates and assumptions about the future development of claims. Actual results could differ materially from those estimates, which are subjective, complex and inherently uncertain. When we establish and adjust reserves, we do so given our knowledge at the time of the circumstances and facts of known claims. To the extent that we have overestimated or underestimated our loss and loss settlement expense reserves, we adjust the reserves in the period in which such adjustment is determined.

We record our best estimate of reserves for claim litigation that arises in the ordinary course of business. We consider all of our pending litigation as of December 31, 2017 to be ordinary, routine and incidental to our business.

Discontinued Operations - Life Insurance Business

Our whole life and term insurance (i.e., traditional business) premiums are reported as earned when due and benefits and expenses are associated with premium income in order to result in the recognition of profits over the lives of the related contracts. Premiums receivable are presented net of an estimated allowance for doubtful accounts. Income annuities with life contingencies (single premium immediate annuities and supplementary contracts) have premium recorded and any related expense charge fees recorded as income and expense when the contract is issued. On universal life and deferred annuity policies (i.e., non-traditional business), income and expenses are reported when charged and credited to policyholder account balances in order to result in recognition of profits over the lives of the related contracts. We accomplish this by means of a provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs.

Liabilities for future policy benefits for traditional products are computed by the net level premium method, using interest assumptions ranging from 3.15 percent to 6.0 percent and withdrawal, mortality and morbidity assumptions appropriate at the time the policies were issued. Liabilities for non-traditional business are stated at policyholder account values before surrender charges. Liabilities for traditional immediate annuities are based primarily upon future anticipated cash flows using assumptions for mortality and interest rates. Liabilities for deferred annuities are carried at the account value.

Reinsurance

Premiums earned and losses and loss settlement expenses incurred are reported net of reinsurance ceded. Ceded insurance business is accounted for on a basis consistent with the original policies issued and the terms of the reinsurance contracts. Refer to Note 4 "Reinsurance" for a discussion of our reinsurance activities.

Investments

Investments in fixed maturities include bonds and redeemable preferred stocks. Our investments in held-to-maturity fixed maturities are recorded at amortized cost. Our investments in available-for-sale fixed maturities and trading securities are recorded at fair value.

Investments in equity securities, which include common and non-redeemable preferred stocks, are classified as available-for-sale or trading and are recorded at fair value.

Changes in unrealized appreciation and depreciation, with respect to available-for-sale fixed maturities and equity securities, are reported as a component of accumulated other comprehensive income, net of applicable deferred income taxes, in stockholders' equity. Changes in unrealized appreciation and depreciation, with respect to trading securities, are reported as a component of income.

Other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. Included in investments at December 31, 2017 and 2016, are securities on deposit with, or available to, various regulatory authorities as required by law, with fair values of $1,492,928 and $1,509,339, respectively.

We review all of our investment holdings for appropriate valuation on an ongoing basis. Refer to Note 2 "Summary of Investments" for a discussion of our accounting policy for impairment recognition.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and non-negotiable certificates of deposit with original maturities of three months or less.

In 2017, 2016, and 2015, we made cash payments for income taxes of $7,667, $24,034 and $39,497, respectively. In addition, we received federal tax refunds of $13,383 and $919 in 2017 and 2015, respectively, that resulted from the utilization of our 2011 net operating losses and net capital losses in the carryforward period. In 2016, we did not receive any federal tax refunds. We made no interest payments in 2017, 2016 and 2015. These payments exclude interest credited to policyholders' accounts.

Deferred Policy Acquisition Costs ("DAC")

Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred. The following table is a summary of the components of DAC that are reported in the accompanying Consolidated Financial Statements.

Continuing Operations - Property and Casualty Insurance	2017			2016			2015
Recorded asset at beginning of year	$	93,362		$	90,547		$	72,861
Underwriting costs deferred	202,486			205,707			197,869
Amortization of deferred policy acquisition costs	(207,746		)	(202,892		)	(180,183		)
Recorded asset at end of year	$	88,102		$	93,362		$	90,547
Discontinued Operations - Life Insurance
Recorded asset at beginning of year	$	70,750		$	77,717		$	66,858
Underwriting costs deferred	5,463			5,564			6,113
Amortization of deferred policy acquisition costs	(5,181		)	(8,121		)	(6,634		)
	$	71,032		$	75,160		$	66,337
Change in "shadow" deferred policy acquisition costs	119			(4,410		)	11,380
Recorded asset at end of year	$	71,151		$	70,750		$	77,717
Total
Recorded asset at beginning of year	$	164,112		$	168,264		$	139,719
Underwriting costs deferred	207,949			211,271			203,982
Amortization of deferred policy acquisition costs	(212,927		)	(211,013		)	(186,817		)
	$	159,134		$	168,522		$	156,884
Change in "shadow" deferred policy acquisition costs	119			(4,410		)	11,380
Recorded asset at end of year	$	159,253		$	164,112		$	168,264

Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned. This estimate is performed by line of business in a manner consistent with how the policies are currently being marketed and managed.

For traditional life insurance policies, DAC is amortized to income over the premium-paying period in proportion to the ratio of the expected annual premium revenue to the expected total premium revenue. Expected premium revenue and gross profits are based on the same mortality and withdrawal assumptions used in determining future policy benefits. These assumptions are not revised after policy issuance unless the recorded DAC asset is deemed to be unrecoverable from future expected profits.

For non-traditional life insurance policies, DAC is amortized over the anticipated terms in proportion to the ratio of the expected annual gross profits to the total expected gross profits. Changes in the amount or timing of expected gross profits result in adjustments to the cumulative amortization of these costs. The effect on amortization of DAC for revisions to estimated gross profits is reported in earnings in the period the estimated gross profits are revised.

The effect on DAC that results from the assumed realization of unrealized gains (losses) on investments allocated to non-traditional life insurance business is recognized with an offset to net unrealized investment appreciation as of the balance sheet date. The impact of unrealized gains (losses) on available-for-sale securities decreased the DAC asset by $6,294, $6,413 and $2,003 at December 31, 2017, 2016 and 2015, respectively.

Property, Equipment and Depreciation

Property and equipment is presented at cost less accumulated depreciation. The following table is a summary of the components of the property and equipment that are reported in the accompanying Consolidated Financial Statements.

	2017		2016
Real estate:
Land	$	8,396	$	8,231
Buildings	48,677		41,119
Furniture and fixtures	4,645		4,711
Computer equipment and software	7,274		1,463
Airplane	—		—
Total property and equipment	$	68,992	$	55,524

Expenditures for maintenance and repairs on property and equipment are generally expensed as incurred. We periodically review these assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the underlying asset may not be recoverable. A loss would be recognized if the estimated fair value of the asset were less than its carrying value.

Depreciation is computed primarily by the straight-line method over the following estimated useful lives:

	Useful Life
Computer equipment and software	Three years
Furniture and fixtures	Seven years
Leasehold improvements	Shorter of the lease term or useful life of the asset
Real estate	Seven to thirty-nine years
Airplane	Five years

Depreciation expense totaled $3,805, $5,266 and $5,704 for 2017, 2016 and 2015, respectively.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets arise as a result of business combinations and consist of the excess of the fair value of consideration paid over the tangible assets acquired and liabilities assumed. All of our goodwill and the majority of our intangible assets relate to the acquisition of Mercer Insurance Group on March 28, 2011. We evaluate goodwill and other intangible assets for impairment at least on an annual basis or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount of goodwill and other intangible assets may exceed its implied fair value. Goodwill is evaluated at the reporting unit level. Any impairment is charged to operations in the period that the impairment is identified. In 2016 and 2015, we performed a quantitative impairment assessment of our goodwill and in 2017, we performed a qualitative impairment assessment of our goodwill. As a result of these assessments, we did not recognize an impairment charge on our goodwill in 2017, 2016 or 2015.

Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized by the straight-line method over periods ranging from 2 years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized. In 2016 and 2015, we performed a quantitative impairment assessment of our indefinite-lived intangible assets and, in 2017, we performed a qualitative impairment assessment of our indefinite lived intangible assets. As a result of these assessments, we did not recognize an impairment charge on our intangible assets in 2017, 2016 and 2015. Amortization expense totaled $769 in 2017, 2016 and 2015, respectively.

Income Taxes

Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense.

The Company performs a quarterly review of its tax positions and makes a determination whether it is more likely than not that the tax position will be sustained upon examination. If based on this review, it appears not more likely than not that the position will be sustained, the Company will calculate any unrecognized tax benefits and calculate any interest and penalties. At December 31, 2017, 2016, and 2015 the Company did not recognize any liability for unrecognized tax benefits. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense.

We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2014. The Internal Revenue Service is conducting a routine examination of our income tax return for the 2015 tax year.

Stock-Based Compensation

We currently have two equity compensation plans. One plan allows us to grant restricted and unrestricted stock, stock appreciation rights, incentive stock options, and non-qualified stock options to employees. The other plan allows us to grant restricted and non-qualified stock options to non-employee directors.

We utilize the Black-Scholes option pricing method to establish the fair value of non-qualified stock options granted under our equity compensation plans. Our determination of the fair value of stock options on the date of grant using this option-pricing model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, which include the expected volatility in our stock price, the expected term of the award, the expected dividends to be paid over the term of the award and the expected risk-free interest rate. Any changes in these assumptions may materially affect the estimated fair value of the award. For our restricted and unrestricted stock awards, we utilize the fair value of our common stock on the date of grant to establish the fair value of the award. Refer to Note 9 "Stock-Based Compensation" for further discussion.

Comprehensive Income

Comprehensive income includes all changes in stockholders' equity during a period except those resulting from investments by and dividends to stockholders.

Subsequent Events

In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements.

Recently Issued Accounting Standards

Accounting Standards Adopted in 2017

Share-Based Payments

In March 2016, the Financial Accounting Standards Board ("FASB") issued new guidance on the accounting for share-based payments. The new guidance was issued to simplify the accounting of share-based payments, specifically in the areas of income taxes, classification on the balance sheets as liabilities or equity and classification in the cash flow statement. The new guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those years. The Company adopted the new guidance prospectively as of January 1, 2017. The new guidance resulted in classification changes between the financing and operating section of the Statement of Cash Flow for stock based compensation expense. The adoption also resulted in a tax benefit of $149 and $695 during the three- and twelve-months ended December 31, 2017.

Income Taxes

In December 2015, the FASB issued guidance on the balance sheet classification of deferred taxes. The new guidance eliminates the requirement to split deferred tax liabilities and assets between current and non-current in a classified balance sheet. The new guidance allows deferred tax liabilities and assets to be included in non-current accounts.The Company adopted the new guidance as of January 1, 2017. The adoption had no impact on the Company's financial position and results of operations since we do not currently report deferred taxes in classified balance sheets.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB finalized the proposed accounting guidance which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the new federal corporate income tax rate. The pronouncement permits the reclassification of other stranded tax effects that relate to the Tax Cuts and Jobs Act (the "Tax Act") but do not directly relate to the change in the federal rate. The guidance is effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption is permitted for reporting periods for which financial statements have not yet been issued or made available for issuance. The Company has early adopted this guidance for the December 31, 2017 Consolidated Financial Statements. The reclassification from Accumulated Other Comprehensive Income to Retained Earnings for the stranded tax effects resulting from the new federal corporate income tax rate was $31.3 million at December 31, 2017.

Pending Adoption of Accounting Standards

Revenue Recognition

In May 2014, the FASB issued comprehensive new guidance on revenue recognition which supersedes nearly all existing revenue recognition guidance under GAAP. The new guidance requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) and all relevant facts and circumstances. Insurance contracts are not within the scope of this new guidance. The new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted the guidance as of January 1, 2018. The Company has completed its review of revenue streams under this new guidance and concluded that the adoption of the new guidance will have no impact on the Company's reporting and disclosure of net premiums earned from insurance contracts, net investment income or net realized gains and losses, as these revenue streams are not within the scope of this new guidance. The remaining revenue streams are immaterial and not impacted by the new standard.

Financial Instruments

In January 2016, the FASB issued guidance updating certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (for example, trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The new guidance also simplifies the impairment process for equity investments without readily determinable fair values. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018. If the new guidance had been adopted as of December 31, 2017, there would be a reclassification from accumulated other comprehensive income to retained earnings of $242.1 million, which is equal to the amount of net unrealized gains and losses on available-for-sale equity securities at December 31, 2017 disclosed in Note 2 "Summary of Investments," of this section. The impact to net realized gains (losses) would equal the change in net unrealized gains and losses on available-for-sale equity securities between December 31, 2017 and December 31, 2016, in the same tables.

Statement of Cash Flows - Classification of Certain Cash Receipts and Payments

In August 2016, the FASB issued an update that clarifies the classification of certain cash receipts and payments in the Statement of Cash Flows. The update addresses eight existing cash flow issues by clarifying the correct classification to establish uniformity in practice. The updated guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018. The adoption will have no impact on the Company's financial position and results of operations.

Defined Benefit Retirement Plan Cost

In March 2017, the FASB issued guidance on the presentation of net periodic benefit costs of defined benefit retirement benefit plans in the Statements of Income. The new guidance requires the service cost component of net periodic benefit cost of defined benefit plans to be presented in the same line in the Statements of Income as other employee compensation expenses. Also, under the new guidance, the service cost component of the net periodic benefit costs will be the only portion of costs subject to be capitalized in assets. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018 and will update the presentation of net periodic benefit costs in its financial statements beginning with its first quarter Form 10-Q as of March 31, 2018. The adoption will have an immaterial impact on the Company's financial position and results of operations.

Share-Based Payments

In May 2017, the FASB issued new guidance which clarifies and addresses the diversity in practice when there is a change in the terms of a share-based payment award. The updated guidance clarifies when to use modification accounting when there is a change in the terms of a share-based payment and provides three conditions where modification accounting should not be applied. The new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted the new guidance as of January 1, 2018. The adoption will have no impact on the Company's financial position and results of operations.

Leases

In February 2016, the FASB issued guidance on the accounting for leases. The new guidance requires lessees to place a right-of-use asset and a lease liability, for all leases with terms greater than 12 months, on their balance sheets. The lease liability will be based on the present value of the future lease payments and the asset will be based on the liability. Expenses will be recognized on the income statement in a similar manner as previous methods. The new guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those years. The Company will adopt the new guidance as of January 1, 2019. The Company has created an inventory of its operating leases and has calculated the undiscounted future minimum lease payments, which are disclosed in Note 13. Lease Commitments. The undiscounted future minimum lease payments at December 31, 2017 is $22.5 million, which represents less than 1.0 percent of the Company's total assets at December 31, 2017. The Company is reviewing and working on updating it's processes and controls under the new guidance. Management currently believes that the adoption will not have a significant impact on the Company's financial position and results of operations.

Financial Instruments - Credit Losses

In June 2016, the FASB issued new guidance on the measurement of credit losses for most financial instruments. The new guidance replaces the current incurred loss model for recognizing credit losses with an expected loss model for instruments measured at amortized cost and requires allowances to be recorded for available-for-sale debt securities rather than reduce the carrying amount. These allowances will be remeasured each reporting period. The new guidance is effective for annual periods beginning after December 15, 2020 and interim periods within those years. The Company will adopt the new guidance as of January 1, 2021 and is currently evaluating the impact on the Company's financial position, results of operations and key processes.

Income Taxes - Intra-entity Transfers

In October 2016, the FASB issued new guidance on the income tax treatment of intra-entity transfers. The new guidance replaces the current guidance which prohibits the recognition of current and deferred income taxes of intra-entity transfers until the asset is sold externally. Under the new guidance, the exemption is eliminated and income taxes will be recognized on transfers of intra-entity assets. The new guidance is effective for annual periods beginning after December 15, 2018 and interim periods beginning after December 15, 2019. The Company will adopt the new guidance as of January 1, 2019 and is currently evaluating the impact on the Company's financial position and results of operations.

Goodwill

In January 2017, the FASB issued new guidance which simplifies the test for goodwill impairment. The new guidance eliminates the implied fair value calculation when measuring a goodwill impairment charge. Under the new guidance, impairment charges will be based on the excess of the carrying value over fair value of goodwill. The new guidance is effective for annual and interim periods beginning after December 15, 2019. The Company will adopt the new guidance as of January 1, 2020 and it currently believes the adoption will have no impact on the Company's financial position and results of operations.

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SUMMARY OF INVESTMENTS

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

SUMMARY OF INVESTMENTS

SUMMARY OF INVESTMENTS

Fair Value of Investments

The table that follows is a reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and available-for-sale equity securities, presented on a consolidated basis, including both continuing and discontinued operations as of December 31, 2017 and 2016.

December 31, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	34		—		—		34
Total Held-to-Maturity Fixed Maturities	$	184	$	—	$	—	$	184
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	17,073	$	4	$	186	$	16,891
U.S. government agency	121,574		1,311		717		122,168
States, municipalities and political subdivisions
General obligations:
Midwest	107,689		2,446		439		109,696
Northeast	47,477		1,174		10		48,641
South	139,870		2,462		813		141,519
West	111,123		2,351		463		113,011
Special revenue:
Midwest	155,475		3,620		351		158,744
Northeast	79,028		1,351		619		79,760
South	260,145		5,218		1,851		263,512
West	156,576		2,929		1,198		158,307
Foreign bonds	51,361		1,441		49		52,753
Public utilities	206,028		3,386		270		209,144
Corporate bonds
Energy	93,191		1,972		110		95,053
Industrials	218,067		3,881		241		221,707
Consumer goods and services	183,253		3,498		494		186,257
Health care	74,125		1,312		29		75,408
Technology, media and telecommunications	146,853		2,376		250		148,979
Financial services	277,824		5,769		442		283,151
Mortgage-backed securities	13,828		101		238		13,691
Collateralized mortgage obligations
Government national mortgage association	157,836		1,921		2,274		157,483
Federal home loan mortgage corporation	201,320		1,879		4,047		199,152
Federal national mortgage association	104,903		1,703		1,174		105,432
Asset-backed securities	4,282		362		8		4,636
Total Available-For-Sale Fixed Maturities	$	2,928,901	$	52,467	$	16,273	$	2,965,095
Equity securities
Common stocks
Public utilities	$	6,394	$	16,075	$	30	$	22,439
Energy	6,514		8,171		120		14,565
Industrials	13,117		53,522		120		66,519
Consumer goods and services	10,110		15,742		164		25,688
Health care	7,763		32,340		—		40,103
Technology, media and telecommunications	6,067		11,556		115		17,508
Financial services	11,529		104,985		67		116,447
Nonredeemable preferred stocks	992		305		—		1,297
Total Available-for-Sale Equity Securities	$	62,486	$	242,696	$	616	$	304,566
Total Available-for-Sale Securities	$	2,991,387	$	295,163	$	16,889	$	3,269,661

December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	23,216	$	87	$	108	$	23,195
U.S. government agency	76,692		1,445		540		77,597
States, municipalities and political subdivisions
General obligations:
Midwest	143,747		1,808		1,412		144,143
Northeast	57,731		909		231		58,409
South	129,475		1,249		2,355		128,369
West	114,524		1,380		2,173		113,731
Special revenue:
Midwest	167,430		2,313		1,433		168,310
Northeast	70,202		487		2,624		68,065
South	244,225		1,753		6,791		239,187
West	134,287		1,509		4,052		131,744
Foreign bonds	62,995		2,239		—		65,234
Public utilities	212,360		3,761		447		215,674
Corporate bonds
Energy	107,084		2,195		419		108,860
Industrials	225,526		5,359		982		229,903
Consumer goods and services	178,135		3,847		295		181,687
Health care	81,211		2,063		151		83,123
Technology, media and telecommunications	143,402		2,029		819		144,612
Financial services	269,981		5,328		1,358		273,951
Mortgage-backed securities	17,288		201		241		17,248
Collateralized mortgage obligations
Government national mortgage association	145,947		1,279		2,766		144,460
Federal home loan mortgage corporation	176,226		1,638		3,406		174,458
Federal national mortgage association	101,414		1,816		1,334		101,896
Asset-backed securities	4,407		145		282		4,270
Total Available-For-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities
Common stocks
Public utilities	$	6,394	$	13,465	$	188	$	19,671
Energy	6,514		8,555		22		15,047
Industrials	13,252		38,715		173		51,794
Consumer goods and services	10,324		13,851		58		24,117
Health care	7,763		19,657		—		27,420
Technology, media and telecommunications	5,931		9,476		38		15,369
Financial services	17,289		98,728		67		115,950
Nonredeemable preferred stocks	1,037		11		—		1,048
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

The following table is a reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and equity securities for continuing and discontinued operations by investment type at December 31, 2017 and 2016.

December 31, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Continuing operations	$	150	$	—	$	—	$	150
Discontinued operations	34		—		—		34
Total Held-to-Maturity Fixed Maturities	$	184	$	—	$	—	184
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,516,610	$	27,412	$	8,952	$	1,535,070
Discontinued operations	1,412,291		25,055		7,321		1,430,025
Total Available-for-Sale Fixed Maturities	$	2,928,901	$	52,467	$	16,273	$	2,965,095
Equity securities:
Continuing operations	$	57,387	$	224,065	$	539	$	280,913
Discontinued operations	5,099		18,631		77		23,653
Total Available-for-Sale Equity Securities	$	62,486	$	242,696	$	616	$	304,566
Total Available-for-Sale Securities	$	2,991,387	$	295,163	$	16,889	$	3,269,661

December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Continuing operations	$	150	$	—	$	—	$	150
Discontinued operations	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,458,235	$	18,725	$	23,674	$	1,453,286
Discontinued operations	1,429,270		26,115		10,545		1,444,840
Total Available-for-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities:
Continuing operations	$	59,994	$	186,692	$	316	$	246,370
Discontinued operations	8,510		15,766		230		24,046
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at December 31, 2017, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

Maturities - Consolidated:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	97,450	$	97,994	$	2,225	$	2,835
Due after one year through five years	150		150		749,372		763,260		9,055		10,547
Due after five years through 10 years	—		—		823,257		839,360		1,302		1,156
Due after 10 years	—		—		776,653		784,087		2,000		2,304
Asset-backed securities	—		—		4,282		4,636		—		—
Mortgage-backed securities	34		34		13,828		13,691		—		—
Collateralized mortgage obligations	—		—		464,059		462,067		—		—
	$	184	$	184	$	2,928,901	$	2,965,095	$	14,582	$	16,842

Maturities - Continuing Operations:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	37,899	$	38,144	$	2,225	$	2,835
Due after one year through five years	150		150		204,494		208,353		9,055		10,547
Due after five years through 10 years	—		—		394,107		402,799		1,302		1,156
Due after 10 years	—		—		694,850		700,879		2,000		2,304
Asset-backed securities	—		—		3,175		3,535		—		—
Mortgage-backed securities	—		—		9,205		9,231		—		—
Collateralized mortgage obligations	—		—		172,880		172,129		—		—
	$	150	$	150	$	1,516,610	$	1,535,070	$	14,582	$	16,842

Maturities - Discontinued Operations:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	59,551	$	59,850	$	—	$	—
Due after one year through five years	—		—		544,878		554,907		—		—
Due after five years through 10 years	—		—		429,150		436,561		—		—
Due after 10 years	—		—		81,803		83,208		—		—
Asset-backed securities	—		—		1,107		1,101		—		—
Mortgage-backed securities	34		34		4,623		4,460		—		—
Collateralized mortgage obligations	—		—		291,179		289,938		—		—
	$	34	$	34	$	1,412,291	$	1,430,025	$	—	$	—

Net Realized Investment Gains and Losses

Net realized gains (losses) on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of net realized investment gains (losses) for 2017, 2016 and 2015, is as follows:

	2017		2016			2015
Net realized investment gains (losses) from continuing operations
Fixed maturities:
Available-for-sale	$	829	$	1,004		$	814
Trading securities
Change in fair value	924		189			(1,352		)
Sales	244		931			1,381
Equity securities:
Available-for-sale	1,553		2,359			1,977
Trading securities
Change in fair value	332		301			(448		)
Sales	57		(6		)	66
Other long-term investments	—		—			(1,314		)
Other-than-temporary-impairment charges:
Fixed maturities	—		—			—
Cash equivalents	—		169			—
Real Estate	116		—			—
Total net realized investment gains from continuing operations	$	4,055	$	4,947		$	1,124
Total net realized investment gains from discontinued operations	4,008		1,156			1,722
Total net realized investment gains	$	8,063	$	6,103		$	2,846

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities from continuing operations for 2017, 2016 and 2015, are as follows:

	2017			2016		2015
Proceeds from sales	$	7,404		$	1,968	$	478
Gross realized gains	1,046			920		451
Gross realized losses	(20		)	—		—

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities from discontinued operations for 2017, 2016 and 2015, are as follows:

	2017			2016			2015
Proceeds from sales	$	7,315		$	12,354		$	11,066
Gross realized gains	1,264			65			683
Gross realized losses	(78		)	(639		)	—

There were no sales of held-to-maturity securities in 2017, 2016 and 2015.

Our investment portfolio includes trading securities with embedded derivatives. These securities are primarily convertible securities which are recorded at fair value. Income or loss, including the change in the fair value of these trading securities, is recognized currently in earnings as a component of net realized investment gains and losses. Our portfolio of trading securities had a fair value of $23,273 and $20,034 at December 31, 2017 and 2016, respectively.

Net Investment Income

Net investment income for the years ended December 31, 2017, 2016 and 2015, is comprised of the following:

Years Ended December 31,	2017			2016		2015
Investment income from continuing operations:
Interest on fixed maturities	$	44,784		$	43,147	$	41,859
Dividends on equity securities	7,108			6,448		6,421
Income on other long-term investments
Investment income	6,870			1,200		1,200
Change in value (1)	(2,812		)	10,178		2,313
Interest on short-term investments	120			47		3
Interest on cash and cash equivalents	1,125			352		234
Other	300			422		433
Total investment income from continuing operations	$	57,495		$	61,794	$	52,463
Less investment expenses	6,305			6,510		5,904
Net investment income from continuing operations	$	51,190		$	55,284	$	46,559
Net investment income from discontinued operations	$	49,720		$	51,538	$	54,222
Net investment income	$	100,910		$	106,822	$	100,781

(1) Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.

Funding Commitment

At December 31, 2017, pursuant to an agreement with our limited liability partnership investments, we are contractually committed to make capital contributions up to $2,175 upon request of the partnerships through December 31, 2023.

Unrealized Appreciation and Depreciation

A summary of changes in net unrealized investment appreciation for 2017, 2016 and 2015, is as follows for continuing operations and discontinued operations:

	2017			2016			2015
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	25,573		$	(21,271	)	$	(37,621	)
Available-for-sale equity securities	40,168			34,179			(6,459		)
Deferred policy acquisition costs	119			(4,410		)	11,380
Income tax effect	(21,545		)	(2,975		)	11,446
Accumulated effect of change in enacted tax rate	36,658			—			—
Total change in net unrealized investment appreciation, net of tax	$	80,973		$	5,523		$	(21,254	)

We continually monitor the difference between our cost basis and the estimated fair value of our investments. Our accounting policy for impairment recognition requires other-than-temporary impairment ("OTTI") charges to be recorded when we determine that it is more likely than not that we will be unable to collect all amounts due according to the contractual terms of the fixed maturity security or that the anticipated recovery in fair value of the equity security will not occur in a reasonable amount of time. Impairment charges on investments are recorded based on the fair value of the investments at the measurement date or based on the value calculated using a discounted cash flow model. Credit-related impairments on fixed maturity securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net income. Any non-credit related impairment is recognized as a component of other comprehensive income. Factors considered in evaluating whether a decline in value is other-than-temporary include: the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; our intention to hold the investment; and the likelihood that we will be required to sell the investment.

The tables on the following pages summarize our fixed maturity and equity securities that were in an unrealized loss position at December 31, 2017 and 2016 for continuing operations and discontinued operations. The securities are presented by the length of time they have been continuously in an unrealized loss position. It is possible that we could recognize OTTI charges in future periods on securities held at December 31, 2017 if future events or information cause us to determine that a decline in fair value is other-than-temporary.

We have evaluated the near-term prospects of the issuers of our fixed maturity securities in relation to the severity and duration of the unrealized loss and determined that these losses did not warrant the recognition of an OTTI charge in 2017 or 2016. In 2015, we recognized a $1,300 credit loss OTTI on an energy sector fixed maturity security in our Consolidated Statements of Income and Comprehensive Income. This security was in our discontinued operations portfolio. All fixed maturity securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. We believe the unrealized depreciation in value of other securities in our fixed maturity portfolio is primarily attributable to changes in market interest rates and not the credit quality of the issuer. We have no intention to sell and it is more likely than not that we will not be required to sell these securities until the fair value recovers to at least equal to our cost basis or the securities mature.

We have evaluated the near-term prospects of the issuers of our equity securities in relation to the severity and duration of the unrealized loss and, unless otherwise noted, these losses do not warrant the recognition of an OTTI charge at December 31, 2017. There were no OTTI losses on equity securities recognized in 2017, 2016 or 2015. Our largest unrealized loss greater than 12 months on an individual equity security at December 31, 2017, 2016 and 2015 was $158, $188 and $225, respectively. We have no intention to sell any of these securities prior to a recovery in value, but will continue to monitor the fair value reported for these securities as part of our overall process to evaluate investments for OTTI recognition.

December 31, 2017	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	5	$	10,370	$	67	2	$	5,765	$	119	$	16,135	$	186
U.S. government agency	11	64,842		390		5	19,372		327		84,214		717
States, municipalities and political subdivisions
General obligations
Midwest	2	2,177		8		3	19,729		431		21,906		439
Northeast	—	—		—		1	3,644		10		3,644		10
South	3	7,959		32		11	29,545		781		37,504		813
West	2	5,944		18		8	25,755		445		31,699		463
Special revenue
Midwest	2	3,486		15		7	19,130		336		22,616		351
Northeast	1	4,471		37		11	28,476		582		32,947		619
South	8	7,749		107		27	69,917		1,744		77,666		1,851
West	3	5,424		16		22	56,753		1,182		62,177		1,198
Foreign bonds	1	857		49		—	—		—		857		49
Public utilities	8	19,186		79		5	8,446		191		27,632		270
Corporate bonds
Energy	1	2,236		13		1	1,606		97		3,842		110
Industrials	10	27,773		146		2	4,275		95		32,048		241
Consumer goods and services	14	32,781		248		3	6,813		246		39,594		494
Health care	4	9,947		29		—	—		—		9,947		29
Technology, media and telecommunications	12	35,319		122		3	10,413		128		45,732		250
Financial services	22	50,144		256		4	11,389		186		61,533		442
Mortgage-backed securities	10	2,458		18		10	6,641		220		9,099		238
Collateralized mortgage obligations
Government national mortgage association	20	49,764		629		17	46,969		1,645		96,733		2,274
Federal home loan mortgage corporation	11	37,543		577		20	75,679		3,470		113,222		4,047
Federal national mortgage association	11	31,958		342		11	20,123		832		52,081		1,174
Asset-backed securities	1	992		8		—	—		—		992		8
Total Available-for-Sale Fixed Maturities	162	$	413,380	$	3,206	173	$	470,440	$	13,067	$	883,820	$	16,273
Equity securities
Common stocks
Public utilities	—	$	—	$	—	1	$	278	$	30	$	278	$	30
Energy	2	528		120		—	—		—		528		120
Industrials	1	99		13		5	193		107		292		120
Consumer goods and services	—	—		—		2	151		164		151		164
Technology, media and telecommunications	2	466		95		1	4		20		470		115
Financial services	2	193		55		1	9		12		202		67
Total Available-for-Sale Equity Securities	7	$	1,286	$	283	10	$	635	$	333	$	1,921	$	616
Total Available-for-Sale Securities	169	$	414,666	$	3,489	183	$	471,075	$	13,400	$	885,741	$	16,889

December 31, 2016	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	9	$	10,800	$	108	—	$	—	$	—	$	10,800	$	108
U.S. government agency	10	36,593		540		—	—		—		36,593		540
States, municipalities and political subdivisions
General obligations
Midwest	27	40,545		1,412		—	—		—		40,545		1,412
Northeast	9	9,874		231		—	—		—		9,874		231
South	37	53,699		2,355		—	—		—		53,699		2,355
West	30	55,265		2,173		—	—		—		55,265		2,173
Special revenue
Midwest	41	62,937		1,433		—	—		—		62,937		1,433
Northeast	22	54,993		2,624		—	—		—		54,993		2,624
South	79	152,979		6,791		—	—		—		152,979		6,791
West	44	81,676		4,052		—	—		—		81,676		4,052
Public utilities	20	38,511		423		2	2,122		24		40,633		447
Corporate bonds
Energy	8	15,938		313		3	8,232		106		24,170		419
Industrials	24	42,854		596		3	5,641		386		48,495		982
Consumer goods and services	11	21,059		295		—	—		—		21,059		295
Health care	9	20,918		151		—	—		—		20,918		151
Technology, media and telecommunications	16	41,230		516		3	10,241		303		51,471		819
Financial services	37	75,286		1,358		—	—		—		75,286		1,358
Mortgage-backed securities	16	9,611		187		5	1,198		54		10,809		241
Collateralized mortgage obligations
Government national mortgage association	36	82,430		2,261		9	13,603		505		96,033		2,766
Federal home loan mortgage corporation	41	105,775		3,165		3	5,141		241		110,916		3,406
Federal national mortgage association	27	46,633		1,091		4	4,341		243		50,974		1,334
Asset-backed securities	1	971		29		1	2,559		253		3,530		282
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities
Common stocks
Public utilities	—	$	—	$	—	3	$	120	$	188	$	120	$	188
Energy	—	—		—		1	163		22		163		22
Industrials	—	—		—		6	239		173		239		173
Consumer goods and services	3	282		55		2	15		3		297		58
Technology, media and telecommunications	7	26		5		8	33		33		59		38
Financial services	3	53		3		2	150		64		203		67
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765

The following tables are a reconciliation for continuing and discontinued operations of our total fixed maturity and equity securities that were in an unrealized loss position at December 31, 2017 and December 31, 2016. The securities are presented by the length of time they have been continuously in an unrealized loss position:

December 31, 2017	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	88	232,489		1,791		112	302,815		7,161		$	535,304	$	8,952
Discontinued operations	74	180,891		1,415		61	167,625		5,906		348,516		7,321
Total Available-for-Sale Fixed Maturities	162	$	413,380	$	3,206	173	$	470,440	$	13,067	$	883,820	$	16,273
Equity securities:
Continuing operations	5	1,129		236		6	385		303		$	1,514	$	539
Discontinued operations	2	157		47		4	250		30		407		77
Total Available-for-Sale Equity Securities	7	$	1,286	$	283	10	$	635	$	333	$	1,921	$	616
Total Available-for-Sale Securities	169	$	414,666	$	3,489	183	$	471,075	$	13,400	$	885,741	$	16,889

December 31, 2016	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	404	$	654,235	$	23,359	12	$	6,288	$	315	$	660,523	$	23,674
Discontinued operations	150	406,342		8,745		21	46,790		1,800		453,132		10,545
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities:
Continuing operations	12	$	351	$	62	17	$	477	$	254	$	828	$	316
Discontinued operations	1	10		1		5	243		229		253		230
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765

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FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

• Level 1: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

• Level 2: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

• Level 3: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period.

To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. We obtain one price for each security. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years experience and who have demonstrated knowledge of the subject security. We request and utilize one broker quote per security.

In order to determine the proper classification in the fair value hierarchy for each security where the price is obtained from an independent pricing service, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements.

When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section.

The fair value of our mortgage loans is determined by modeling performed by us based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the loan's fair value, which is a Level 3 fair value measurement.

The fair value of our policy loans is equivalent to carrying value, which is a reasonable estimate of fair value and is classified as Level 2. We do not make policy loans for amounts in excess of the cash surrender value of the related policy. In all instances, the policy loans are fully collateralized by the related liability for future policy benefits for traditional insurance policies or by the policyholders' account balance for non-traditional policies.

Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers.

For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments.

The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Non-qualified Deferred Compensation Plan and United Fire Group Supplemental Executive Retirement and Deferral Plan (collectively the "Executive Retirement Plans"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plans. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of December 31, 2017, the cash surrender value of the COLI policies was $4,029, which is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policies, and is included in other assets in the Consolidated Balance Sheets.

Policy reserves are developed and recorded for deferred annuities, which is an interest-sensitive product, and income annuities. The fair value of the reserve liability for these annuity products is based upon an estimate of the discounted pretax cash flows that are forecast for the underlying business, which is a Level 3 fair value measurement. We base the discount rate on the current U.S. Treasury spot yield curve, which is then risk-adjusted for nonperformance risk and, for interest-sensitive business and market risk factors. The risk-adjusted discount rate is developed using interest rates that are available in the market and representative of the risks applicable to the underlying business.

A summary of the carrying value and estimated fair value of our financial instruments from continuing operations at December 31, 2017 and 2016 is as follows:

	December 31, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	150	$	150	$	150	$	150
Available-for-sale securities	1,535,070		1,535,070		1,453,286		1,453,286
Trading securities	16,842		16,842		14,390		14,390
Equity securities:
Available-for-sale securities	280,913		280,913		246,370		246,370
Trading securities	6,431		6,431		5,644		5,644
Other long-term investments	49,352		49,352		51,769		51,769
Short-term investments	175		175		175		175
Cash and cash equivalents	95,562		95,562		89,194		89,194
Corporate-owned life insurance	4,029		4,029		2,592		2,592

A summary of the carrying value and estimated fair value of our financial instruments from discontinued operations at December 31, 2017 and 2016 is as follows:

	December 31, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	34	$	34	$	49	$	48
Available-for-sale securities	1,430,025		1,430,025		1,444,840		1,444,840
Equity securities:
Available-for-sale securities	23,653		23,653		24,046		24,046
Mortgage loans	3,594		3,435		3,895		3,706
Policy loans	5,815		5,815		5,366		5,366
Other long-term investments	16,437		16,437		15,870		15,870
Cash and cash equivalents	15,851		15,851		21,659		21,659
Liabilities
Policy reserves
Annuity (accumulations) (1)	$	591,702	$	611,866	$	646,764	$	666,711
Annuity (benefit payments)	147,038		93,560		144,283		95,129

The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table include financial instruments from both continuing and discontinued operations at December 31, 2017 and 2016:

			Fair Value Measurements
Description	December 31, 2017		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	16,891	$	—	$	16,891	$	—
U.S. government agency	122,168		—		122,168		—
States, municipalities and political subdivisions
General obligations
Midwest	109,696		—		109,696		—
Northeast	48,641		—		48,641		—
South	141,519		—		141,519		—
West	113,011		—		113,011		—
Special revenue
Midwest	158,744		—		158,744		—
Northeast	79,760		—		79,760		—
South	263,512		—		263,512		—
West	158,307		—		158,307		—
Foreign bonds	52,753		—		52,753		—
Public utilities	209,144		—		209,144		—
Corporate bonds
Energy	95,053		—		95,053		—
Industrials	221,707		—		221,707		—
Consumer goods and services	186,257		—		185,589		668
Health care	75,408		—		75,408		—
Technology, media and telecommunications	148,979		—		148,979		—
Financial services	283,151		—		275,474		7,677
Mortgage-backed securities	13,691		—		13,691		—
Collateralized mortgage obligations
Government national mortgage association	157,483		—		157,483		—
Federal home loan mortgage corporation	199,152		—		199,152		—
Federal national mortgage association	105,432		—		105,432		—
Asset-backed securities	4,636		—		3,989		647
Total Available-For-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities
Common stocks
Public utilities	$	22,439	$	22,439	$	—	$	—
Energy	14,565		14,565		—		—
Industrials	66,519		66,517		2		—
Consumer goods and services	25,688		25,688		—		—
Health care	40,103		40,103		—		—
Technology, media and telecommunications	17,508		17,508		—		—
Financial services	116,447		116,447		—		—
Nonredeemable preferred stocks	1,297		415		—		882
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	2,220	$	—	$	2,220	$	—

Consumer goods and services	1,535		—		1,535		—
Health care	3,741		—		3,741		—
Technology, media and telecommunications	1,221		—		1,221		—
Financial services	5,566		—		5,566		—
Redeemable preferred stocks	2,559		2,559		—		—
Equity securities
Public utilities	874		874		—		—
Energy	190		190		—		—
Industrials	989		989		—		—
Consumer goods and services	1,314		1,314		—		—
Health care	325		325		—		—
Financial Services	198		198		—		—
Nonredeemable preferred stocks	2,541		2,541		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

			Fair Value Measurements
Description	December 31, 2016		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	23,195	$	—	$	23,195	$	—
U.S. government agency	77,597		—		77,597		—
States, municipalities and political subdivisions
General obligations
Midwest	144,143		—		144,143		—
Northeast	58,409		—		58,409		—
South	128,369		—		128,369		—
West	113,731		—		113,731		—
Special revenue
Midwest	168,310		—		168,142		168
Northeast	68,065		—		68,065		—
South	239,187		—		239,187		—
West	131,744		—		131,744		—
Foreign bonds	65,234		—		65,234		—
Public utilities	215,674		—		215,674		—
Corporate bonds
Energy	108,860		—		108,860		—
Industrials	229,903		—		229,903		—
Consumer goods and services	181,687		—		180,590		1,097
Health care	83,123		—		83,123		—
Technology, media and telecommunications	144,612		—		144,612		—
Financial services	273,951		—		265,154		8,797
Mortgage-backed securities	17,248		—		17,248		—
Collateralized mortgage obligations
Government national mortgage association	144,460		—		144,460		—
Federal home loan mortgage corporation	174,458		—		174,458		—
Federal national mortgage association	101,896		—		101,896		—
Asset-backed securities	4,270		—		3,821		449
Total Available-For-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities
Common stocks
Public utilities	$	19,671	$	19,671	$	—	$	—
Energy	15,047		15,047		—		—
Industrials	51,794		51,794		—		—
Consumer goods and services	24,117		24,117		—		—
Health care	27,420		27,420		—		—
Technology, media and telecommunications	15,369		15,369		—		—
Financial services	115,950		111,958		—		3,992
Nonredeemable preferred stocks	1,048		453		—		595
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	3,919	$	—	$	3,919	$	—
Consumer goods and services	127		—		127		—
Health care	3,410		—		3,410		—
Technology, media and telecommunications	787		—		787		—

Financial services	4,842		—		4,842		—
Redeemable preferred stocks	1,305		1,305		—		—
Equity securities
Public utilities	613		613		—		—
Energy	286		286		—		—
Industrials	877		877		—		—
Consumer goods and services	1,202		1,202		—		—
Health care	339		339		—		—
Financial Services	206		206		—		—
Nonredeemable preferred stocks	2,121		2,121		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

The following tables are a reconciliation for both continuing and discontinued operations of the presentation of the categorization for our financial instruments measured at fair value on a recurring basis at December 31, 2017 and 2016:

December 31, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,535,070	$	—	$	1,534,323	$	747
Discontinued operations	1,430,025		—		1,421,780		8,245
Total Available-for-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities:
Continuing operations	$	280,913	$	280,031	$	—	$	882
Discontinued operations	23,653		23,651		2		—
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities:
Continuing operations	$	16,842	$	2,559	$	14,283	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	6,431		6,431		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	6,147	$	6,147	$	—	$	—
Discontinued operations	10,677		10,677		—		—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	4,029	$	—	$	4,029	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

December 31, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,453,286	$	—	$	1,452,737	$	549
Discontinued operations	1,444,840		—		1,434,878		9,962
Total Available-for-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities:
Continuing operations	$	246,370	$	243,627	$	—	$	2,743
Discontinued operations	24,046		22,202		—		1,844
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities:
Continuing operations	$	14,390	$	1,305	$	13,085	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	5,644		5,644		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	4,810	$	4,810	$	—	$	—
Discontinued operations	11,992		11,992		—		—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	2,592	$	—	$	2,592	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available.

We use a market-based approach for valuing all of our Level 2 securities and receive them primarily from a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider for pricing. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day.

At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. Our validation process includes a review for unusual fluctuations. Unusual fluctuations outside of our expectations are independently corroborated with additional third-party sources that use similar valuation techniques as discussed above. In addition, we also randomly select securities and independently corroborate the valuations obtained from our third-party valuation service providers. In our opinion, the pricing obtained at December 31, 2017 and 2016 was reasonable.

For the year ended December 31, 2017, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities. During the twelve month period ended December 31, 2017, there were no securities transferred between Level 1 and Level 2.

Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers’ valuation processes. If pricing cannot be obtained from these sources, which occurs on a limited basis, management will perform a discounted cash flow analysis, using an appropriate risk-adjusted discount rate, on the underlying security to estimate fair value. During the twelve month period ended December 31, 2017, there were no securities transferred in or out of Level 3.

The following table provides a summary of the changes in fair value of our Level 3 securities, from both continuing and discontinued operations for 2017:

	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities		Equities			Total
Balance at January 1, 2017	$	168		$	9,894		$	449	$	4,587		$	15,098
Unrealized gains (losses) (1)	(8		)	(129		)	198		287			348
Purchases	—			100			—		145			245
Disposals	(160		)	(1,520		)	—		(4,137		)	(5,817		)
Balance at December 31, 2017	$	—		$	8,345		$	647	$	882		$	9,874

(1) Realized gains (losses) are recorded as a component of earnings, whereas unrealized gains (losses) are recorded as a component of comprehensive income.

The following table provides a summary of the changes in fair value of our Level 3 securities, from both continuing and discontinued operations for 2016:

	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2016	$	343		$	10,895		$	1,036		$	3,978		$	16,252
Realized gains (losses) (1)	—			—			—			—			—
Unrealized gains (losses) (1)	(15		)	134			(39		)	—			80
Purchases	—			—			—			727			727
Disposals	(160		)	(1,135		)	(548		)	(118		)	(1,961		)
Balance at December 31, 2016	$	168		$	9,894		$	449		$	4,587		$	15,098

(1) Realized gains (losses) are recorded as a component of earnings, whereas unrealized gains (losses) are recorded as a component of comprehensive income.

The fixed maturities reported as disposals relate to the receipt of principal on calls or sinking fund bonds, in accordance with the indentures.

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REINSURANCE

12 Months Ended

Dec. 31, 2017

Reinsurance Disclosures [Abstract]

REINSURANCE

REINSURANCE

Continuing Operations - Property and Casualty Insurance Business

Ceded and Assumed Reinsurance

Reinsurance is a contract by which one insurer, called the reinsurer, agrees to cover, under certain defined circumstances, a portion of the losses incurred by a primary insurer if a claim is made under a policy issued by the primary insurer. Our property and casualty insurance companies follow the industry practice of reinsuring a portion of their exposure by ceding to reinsurers a portion of the premium received and a portion of the risk under the policies written. We purchase reinsurance to reduce the net liability on individual risks to predetermined limits and to protect us against catastrophic losses, such as a hurricane or tornado. We do not engage in any reinsurance transactions classified as finite risk reinsurance.

We account for premiums, written and earned, and losses incurred net of reinsurance ceded. The ceding of insurance does not legally discharge us from primary liability under our policies, and we must pay the loss if the reinsurer fails to meet its obligation. We periodically monitor the financial condition of our reinsurers to confirm that they are financially stable. We believe that all of our reinsurers are in an acceptable financial condition and there were no reinsurance balances at December 31, 2017 for which collection is at risk that would result in a material impact on our Consolidated Financial Statements. The amount of reinsurance recoverable on paid losses totaled $2,859 and $2,447 at December 31, 2017 and 2016, respectively.

We also assume both property and casualty insurance from other insurance or reinsurance companies. Most of the business we have assumed is property insurance, with an emphasis on catastrophe coverage.

Premiums and losses and loss settlement expenses related to our ceded and assumed business are as follows:

Years Ended December 31,	2017		2016		2015
Ceded Business
Ceded premiums written	$	61,273	$	57,988	$	56,916
Ceded premiums earned	61,305		57,996		56,758
Loss and loss settlement expenses ceded	33,303		13,278		3,868
Assumed Business
Assumed premiums written	$	15,179	$	16,834	$	18,290
Assumed premiums earned	15,059		17,037		18,396
Loss and loss settlement expenses assumed	24,688		9,814		14,415

In 2017, we renewed our participation in all of our assumed programs. Loss and loss settlement expenses ceded increased in 2017 as compared to 2016, primarily due to an increase in severity of commercial auto losses, assumed reinsurance losses and catastrophe losses.

In 2016, we renewed our participation in all of our assumed programs. Loss and loss settlement expenses ceded increased in 2016 as compared to 2015, primarily due to an increase in significant large losses and catastrophe losses.

In 2015, we renewed our participation in all of our assumed programs and added one new program to our portfolio. The new assumed program is for international catastrophes excluding the United States with the largest exposure to European wind perils.

Refer to Note 5 "Reserves for Losses and Loss Settlement Expenses" for an analysis of changes in our overall property and casualty insurance reserves.

Reinsurance Programs and Retentions

We have several programs that provide reinsurance coverage. This reinsurance coverage limits the risk of loss that we retain by reinsuring direct risks in excess of our retention limits. The following table provides a summary of our primary reinsurance programs. Retention amounts reflect the accumulated retentions and co-participation of all layers within a program. For 2017, there was an all lines annual aggregate excess of loss program with variable retention of 7.02 percent of gross net earned premium with a minimum retention of $58.5 million and a maximum of $71.5 million. Our all lines aggregate recovery is also limited to $30.0 million. For 2016, there was an all lines annual aggregate excess of loss program with a variable retention of 7.73 percent of gross net earned premium with a minimum retention of $52.0 million and a maximum of $65.0 million. Our all lines aggregate recovery is also limited to a maximum of $30.0 million. For 2015, there was a $4,000 aggregate annual deductible on our multi-line core program (casualty excess and property excess).

	2017 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,500	$	60,000	100	%	of	$	57,500
Property excess of loss	2,500		25,000		100	%	of	$	22,500
Surety excess of loss	1,500		45,000		100	%	of	$	43,500
Property catastrophe, excess	20,000		250,000		100	%	of	$	230,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

	2016 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,500	$	40,000	100	%	of	$	37,500
Property excess of loss	2,500		25,000		100	%	of	$	22,500
Surety excess of loss	1,500		36,000		100	%	of	$	34,500
Property catastrophe, excess	20,000		250,000		100	%	of	$	230,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

	2015 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,000	$	40,000	100	%	of	$	38,000
Property excess of loss	2,000		25,000		100	%	of	$	23,000
Surety excess of loss	1,500		36,000		96	%	of	$	34,500
Property catastrophe, excess	20,000		200,000		100	%	of	$	180,000
Property catastrophe, excess	200,000		250,000		90.5	%	of	$	50,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

If we incur catastrophe losses and loss settlement expenses that exceed the coverage limits of our reinsurance program, our property catastrophe program provides one guaranteed reinstatement. In such an instance, we are required to pay the reinsurers a reinstatement premium equal to the full amount of the original premium, which will reinstate the full amount of reinsurance available under the property catastrophe program.

Discontinued Operations - Life Insurance Business

Ceded Reinsurance

United Life purchases reinsurance to limit the dollar amount of any one risk of loss. Our retention on standard individual life cases is $300. Our accidental death benefit rider on an individual policy is reinsured at 100 percent, up to a maximum benefit of $250. Our group coverage, both life and accidental death and dismemberment, is reinsured at 50.0 percent. Catastrophe excess reinsurance coverage applies when three or more insureds die in a catastrophic accident. For catastrophe excess claims, we retain the first $1,000 of ultimate net loss and the reinsurer agrees to indemnify us for the excess up to a maximum of $5,000. We supplement this coverage when appropriate with "known concentration" coverage. Known concentration coverage is typically tied to a specific event and time period, with a threshold of a minimum number of lives involved in the event, minimum event deductible (stated retention limit) and a maximum payout.

Premiums and losses and loss settlement expenses related to our ceded business are as follows:

Years Ended December 31,	2017		2016		2015
Ceded Business
Ceded insurance in-force	$	1,014,794	$	1,023,197	$	1,165,868
Ceded premiums earned	2,722		2,768		3,161
Loss and loss settlement expenses ceded	3,726		3,359		2,113

The ceding of insurance does not legally discharge United Life from primary liability under its policies. United Life must pay the loss if the reinsurer fails to meet its obligations. We periodically monitor the financial condition of our reinsurers to confirm that they are financially stable and have strong credit ratings. We believe that all of our reinsurers are in an acceptable financial condition. Approximately 99 percent of ceded life insurance in force as of December 31, 2017 was ceded to five reinsurers.

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES

12 Months Ended

Dec. 31, 2017

Insurance Loss Reserves [Abstract]

RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES

RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES

Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance primarily covers liability for damage to property of, or injury to, a person or entity other than the insured. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy.

Liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends. Because property and casualty insurance reserves are estimates of the unpaid portions of incurred losses that have been reported to us, as well as losses that have been incurred but not reported, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses and related loss settlement expenses may vary materially from recorded amounts. We regularly update our reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported as a component of losses and loss settlement expenses incurred in the period such changes are determined.

The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will take action that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc. ("Regnier"), to render an opinion as to the reasonableness of our statutory reserves annually. The actuarial opinion is filed in those states where we are licensed.

On a quarterly basis, United Fire's internal actuary performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our internal actuary to review, on a regular and quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate.

Our IBNR methodologies and assumptions are reviewed periodically, but changes are infrequent. Between calendar year 2015 and 2016, in response to an increase in miles driven by commercial vehicles, we revised our commercial automobile frequency and severity assumptions, resulting in an increase to our carried loss IBNR. We also reviewed our methodology and assumptions in our product liability line, associated with our construction defects business, and decreased our frequency and severity assumptions due to improvement in development patterns related to the statute of limitations on accident years that have matured 13 to 15 years which haven't developed to the extent we initially expected. These assumption changes resulted in a release of IBNR in 2016 and 2017 for our product liability line. Besides the changes to our assumptions used for our commercial automobile line and product liability line, we continually review and revise items affecting our projections of required reserves for unpaid loss and loss adjustment expense ("LAE"). Items reviewed and revised include development factors for paid and reported loss, paid development factors for allocated LAE, and the ratios of paid unallocated LAE to paid loss.

We do not discount loss reserves based on the time value of money. 

The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves for 2017, 2016 and 2015 (net of reinsurance amounts):

Years Ended December 31,	2017			2016			2015
Gross liability for losses and loss settlement expenses at beginning of year	$	1,123,896		$	1,003,895		$	969,437
Ceded losses and loss settlement expenses	(59,794		)	(54,653		)	(63,757		)
Net liability for losses and loss settlement expenses at beginning of year	$	1,064,102		$	949,242		$	905,680
Losses and loss settlement expenses incurred for claims occurring during
Current year	$	779,966		$	683,662		$	560,482
Prior years	(54,253		)	(31,229		)	(40,395		)
Total incurred	$	725,713		$	652,433		$	520,087
Losses and loss settlement expense payments for claims occurring during
Current year	$	311,972		$	277,053		$	225,022
Prior years	313,531			260,520			251,503
Total paid	$	625,503		$	537,573		$	476,525
Net liability for losses and loss settlement expenses at end of year	$	1,164,312		$	1,064,102		$	949,242
Ceded loss and loss settlement expenses	59,871			59,794			54,653
Gross liability for losses and loss settlement expenses at end of year	$	1,224,183		$	1,123,896		$	1,003,895

There are a multitude of factors that can impact loss reserve development. Those factors include, but are not limited to: historical data, the potential impact of various loss reserve development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific dollar impact of any individual factor on the development of reserves.

The significant drivers of the favorable reserve development in 2017 were our commercial liability and workers compensation lines of business. Much of the favorable commercial liability development came from loss adjustment expense and is attributed to our continued litigation management efforts combined with some favorable development coming from decreases in reserves, which were more than sufficient to pay claims as they closed. Workers compensation favorable development was due to the combined effects of decreases in claim reserves along with favorable changes affecting loss adjustment expense. Our personal lines also contributed favorable development. The lines that experienced adverse development during the year, which partially offset the favorable development mentioned earlier, were assumed reinsurance and commercial automobile. The adverse development for assumed reinsurance is due to increases in prior year reserves for unpaid claims while the adverse development for commercial auto is due to paid losses which were greater than reductions in reported loss reserves and reserves for claims incurred but not reported. No other single line of business contributed a significant portion of the total development.

The significant drivers of the favorable reserve development in 2016 were our commercial liability and workers compensation lines of business. Much of the favorable commercial liability development came from loss adjustment expense and is attributed to our continued litigation management efforts. Workers compensation favorable development was due to the combined effects of decreases in claim reserves along with favorable changes affecting loss adjustment expense. Loss adjustment expense, closely tied to loss, generally decreases when loss decreases. Commercial property, commercial automobile and assumed reinsurance lines of business exhibited adverse development which provided a partial offset to the favorable development previously noted. The adverse development for all three lines is due to paid loss which was greater than reductions in reported loss reserves and reserves for claims incurred but not reported. No other single line of business contributed a significant portion of the total development.

The significant drivers of the favorable reserve development in 2015 were our long-tail liability lines, workers compensation, and automobile (physical damage) lines of business. The favorable development is attributable to reductions in reserves for reported claims as well as reductions in required reserves for IBNR claims combined with continued successful management of litigation expenses. These reserve decreases were more than sufficient to offset claim payments. The favorable development was partially offset by adverse development, the majority coming from three lines which included property, assumed reinsurance and commercial auto liability. No other single line of business contributed a significant portion of the total development.

Generally, we base reserves for each claim on the estimated ultimate exposure for that claim. We believe that it is appropriate and reasonable to establish a best estimate for reserves within a range of reasonable estimates, especially when we are reserving for claims for bodily injury, disabilities and similar claims, for which settlements and verdicts can vary widely. Our reserving philosophy may result in favorable reserve development in future years that will decrease losses and loss settlement expenses for prior year claims in the year of adjustment. We realize that this philosophy, coupled with what we believe to be aggressive and successful claims management and loss settlement practices, has resulted in year-to-year redundancies in reserves. We believe our approach produces recorded reserves that are reasonably consistent as to their relative position within a range of reasonable reserves from year-to-year. However, conditions and trends that have affected the reserve development for a given year do change. Therefore, such development cannot be used to project future reserve redundancies or deficiencies.

We are not aware of any significant contingent liabilities related to environmental issues. Because of the type of property coverage we write, we have potential exposure to environmental pollution, mold and asbestos claims. Our underwriters are aware of these exposures and use riders or endorsements to limit exposure.

The following tables provide information about incurred and paid losses and loss settlement expense development as of December 31, 2017, net of reinsurance, as well as cumulative development, cumulative claim frequency and IBNR liabilities. Claim data for Mercer Insurance Group, which was acquired on March 28, 2011, is presented retrospectively.

The cumulative number of reported claims, for calendar year 2017 and 2016, are counted for all lines of business on a per claimant per coverage basis and a single event may result in multiple claims due to the involvement of multiple individual claimants and / or multiple independent coverages. Claim counts for calendar years 2015 and prior are counted on a per claim and per coverage basis. Claim counts include open claims, claims that have been paid and closed, and reported claims that have been closed without the need for any payment.

Line of business: Commercial other liability
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	79,455	$	84,944	$	81,963	$	73,892	$	63,231	$	78,152	$	75,178	$	74,115	$	74,915	$	75,364	$	12,636	(4,091	)	6,734
2009			88,298		85,991		73,545		65,831		84,286		83,660		85,761		86,757		86,543		11,268		(1,755	)	6,123
2010					88,987		69,533		65,299		82,865		78,564		77,948		78,291		78,498		14,468		(10,489	)	5,174
2011							81,522		64,738		88,371		88,200		79,591		80,801		81,463		15,016		(59	)	5,328
2012									100,389		96,158		94,195		91,980		92,537		91,346		18,407		(9,043	)	5,540
2013											104,982		91,460		90,502		86,119		85,399		9,697		(19,583	)	6,007
2014													118,928		117,958		106,486		97,809		13,583		(21,119	)	6,109
2015															137,386		125,307		120,005		25,634		(17,381	)	7,083
2016																	139,144		130,041		35,760		(9,103	)	7,512
2017																			139,602		68,465				5,833
																	Total		$	986,070

Line of business: Commercial other liability
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	9,220	$	24,096	$	34,482	$	42,545	$	47,112	$	50,143	$	52,659	$	55,843	$	59,052	$	60,698
2009			8,375		21,151		32,073		41,696		50,098		56,789		63,149		67,733		70,814
2010					7,103		15,230		24,577		35,043		51,336		56,761		60,116		62,070
2011							6,236		13,670		26,260		40,595		50,146		56,150		62,165
2012									6,875		24,620		39,948		55,316		64,574		69,800
2013											9,835		25,228		39,953		54,559		65,773
2014													10,207		29,679		50,211		70,363
2015															11,185		27,182		53,901
2016																	13,782		38,184
2017																			17,716
																	Total		$	571,484
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														29,167
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	443,753

Line of business: Commercial fire and allied
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	157,303	$	141,384	$	138,602	$	140,321	$	134,821	$	116,940	$	118,115	$	118,376	$	118,329	$	118,308	$	44	(38,995	)	21,101
2009			113,754		106,085		105,031		105,614		87,751		87,845		87,932		88,891		89,027		154		(24,727	)	18,038
2010					113,139		106,152		108,246		83,836		83,932		83,767		83,981		84,213		229		(28,926	)	16,671
2011							148,220		142,330		117,082		120,492		119,820		120,219		121,434		611		(26,786	)	16,026
2012									138,602		110,448		108,774		108,047		107,958		108,623		970		(29,979	)	6,408
2013											91,521		88,550		91,498		92,212		93,826		1,139		2,305		6,598
2014													126,216		131,198		128,762		128,185		1,397		1,969		7,827
2015															103,177		108,293		110,633		3,370		7,456		7,465
2016																	147,473		144,208		3,597		(3,265	)	9,496
2017																			155,139		16,178				11,574
																	Total		$	1,153,596

Line of business: Commercial fire and allied
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	80,005	$	102,804	$	107,480	$	112,678	$	115,804	$	115,897	$	117,553	$	117,690	$	118,003	$	118,059
2009			53,219		72,181		77,732		82,809		86,930		87,544		87,721		88,037		88,159
2010					52,660		72,271		78,284		80,352		82,037		83,000		83,374		83,915
2011							85,585		104,800		109,429		112,497		116,614		118,183		120,178
2012									71,008		94,380		100,078		103,197		105,250		106,521
2013											59,331		78,226		82,853		86,115		89,200
2014													84,456		113,663		116,750		122,370
2015															67,217		90,454		95,515
2016																	92,895		125,962
2017																			99,484
																	Total		$	1,049,363
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														573
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	104,806

Line of business: Commercial automobile
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	80,461	$	78,391	$	76,051	$	76,527	$	75,070	$	75,021	$	73,506	$	73,431	$	73,463	$	73,487	$	12	(6,974	)	18,114
2009			80,021		69,328		68,569		64,121		64,516		63,605		63,560		63,567		63,509		—		(16,512	)	15,019
2010					75,781		68,068		65,860		67,015		67,563		67,296		68,086		67,910		17		(7,871	)	16,245
2011							84,887		87,299		90,750		92,519		92,379		91,336		90,766		311		5,879		15,246
2012									100,039		90,848		94,755		95,321		96,594		96,389		488		(3,650	)	14,353
2013											104,356		98,037		102,943		103,726		104,980		1,310		624		15,504
2014													107,723		106,076		113,720		118,869		3,634		11,146		17,222
2015															125,506		129,816		132,206		7,874		6,700		19,875
2016																	174,018		175,357		21,439		1,339		26,662
2017																			227,919		58,850				28,858
																	Total		$	1,151,392

Line of business: Commercial automobile
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	30,527	$	47,271	$	58,926	$	68,629	$	70,459	$	72,122	$	72,984	$	72,990	$	73,018	$	73,394
2009			27,674		44,867		53,451		58,087		61,398		62,732		63,495		63,503		63,508
2010					29,329		41,141		52,953		57,947		62,231		65,169		67,622		67,852
2011							34,332		50,931		65,021		79,383		85,348		87,475		88,609
2012									39,247		57,201		71,469		82,944		90,292		93,179
2013											43,592		67,630		79,663		90,780		96,375
2014													45,704		68,033		87,590		99,922
2015															50,782		78,225		99,201
2016																	66,013		103,528
2017																			81,311
																	Total		$	866,879
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														39
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	284,552

Line of business: Workers' compensation
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	42,739	$	42,301	$	39,895	$	41,278	$	40,474	$	40,010	$	39,386	$	39,680	$	39,768	$	38,664	$	499	(4,075	)	5,057
2009			43,560		39,009		36,294		36,837		36,823		36,158		36,014		35,026		35,012		489		(8,548	)	4,264
2010					38,210		42,531		41,180		41,167		40,647		41,422		41,468		42,617		596		4,407		3,978
2011							39,967		38,481		35,352		34,309		33,585		33,314		33,352		747		(6,615	)	3,930
2012									48,848		46,279		42,158		38,423		38,553		39,015		754		(9,833	)	3,813
2013											64,048		62,579		56,369		54,584		52,761		975		(11,287	)	4,173
2014													64,051		60,729		58,284		56,630		1,409		(7,421	)	4,593
2015															53,788		55,578		51,003		1,753		(2,785	)	5,311
2016																	70,419		66,575		3,392		(3,844	)	6,732
2017																			76,184		7,317				5,460
																	Total		$	491,813

Line of business: Workers' compensation
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	10,082	$	21,227	$	25,736	$	30,123	$	31,980	$	33,770	$	34,319	$	34,862	$	35,292	$	36,010
2009			10,478		20,292		24,189		27,747		29,898		31,003		31,886		32,911		33,117
2010					11,821		22,606		28,765		31,887		33,119		34,143		35,052		38,973
2011							10,322		21,678		26,033		27,497		28,247		29,022		29,453
2012									11,802		23,023		28,397		30,933		33,063		34,330
2013											14,136		30,209		38,023		42,941		45,078
2014													13,965		30,289		38,441		42,964
2015															12,063		27,304		35,229
2016																	14,413		32,345
2017																			14,647
																	Total		$	342,146
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														18,973
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	168,640

Line of business: Personal
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	49,961	$	44,686	$	43,408	$	43,672	$	43,577	$	43,535	$	43,515	$	43,482	$	42,882	$	42,881	$	—	(7,080	)	15,821
2009			34,597		33,519		31,945		32,026		32,134		32,029		32,085		32,070		31,867		2		(2,730	)	13,502
2010					36,686		34,347		33,928		33,865		33,403		33,413		33,432		33,213		29		(3,473	)	13,325
2011							50,014		48,534		47,090		47,035		46,968		47,013		46,733		74		(3,281	)	14,843
2012									47,924		46,199		46,403		46,150		44,715		44,352		108		(3,572	)	10,769
2013											39,232		38,525		37,262		37,086		36,729		172		(2,503	)	9,232
2014													53,910		52,661		52,944		52,782		236		(1,128	)	10,899
2015															42,848		41,088		40,336		396		(2,512	)	9,490
2016																	48,072		45,840		733		(2,232	)	11,674
2017																			60,330		3,310				13,049
																	Total		$	435,063

Line of business: Personal
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	32,032	$	40,114	$	41,735	$	42,414	$	42,613	$	42,627	$	42,748	$	42,748	$	42,787	$	42,881
2009			22,086		27,926		29,801		30,829		31,564		31,644		31,718		31,804		31,837
2010					24,499		29,867		31,340		32,076		32,771		32,997		33,165		33,158
2011							36,489		43,801		45,306		45,949		46,487		46,573		46,575
2012									30,415		41,979		43,375		44,448		43,569		44,139
2013											25,505		32,788		34,297		35,306		36,155
2014													37,055		47,912		49,710		51,837
2015															29,551		37,431		39,027
2016																	32,999		40,910
2017																			42,135
																	Total		$	408,654
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														1,326
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	27,735

The reconciliation of the net incurred and loss development tables to the liability for unpaid losses and loss settlement expenses in the consolidated statement of financial position is as follows.

	December 31, 2017
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses:
Commercial other liability	$	443,753
Commercial fire and allied	104,806
Commercial automobile	284,552
Commercial workers' compensation	168,640
Personal	27,735
All other lines	43,709
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	1,073,195
Net outstanding liabilities for unpaid unallocated loss settlement expenses	88,193
Fair value adjustment (purchase accounting adjustment for Mercer acquisition)	2,924
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	1,164,312
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses:
Commercial other liability	20,367
Commercial fire and allied	10,806
Commercial automobile	1,994
Commercial workers' compensation	26,799
Personal	26
All other lines	2,675
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	62,667
Reinsurance fair value amortization (purchase accounting adjustment for Mercer acquisition)	(2,796		)
Total reinsurance recoverable on unpaid losses and loss settlement expenses	59,871
Total gross liability for unpaid losses and loss settlement expenses	$	1,224,183

The following is supplementary information about average historical claims duration as of December 31, 2017.

	Average annual percentage payout of incurred claims by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	(Unaudited)
Commercial other liability	10.1	%	15.9	%	16.4	%	15.3	%	11.9	%	6.4	%	5.6	%	4.0	%	3.9	%	2.2	%
Commercial fire and allied	64.4	%	20.9	%	4.8	%	3.7	%	3.0	%	0.9	%	0.9	%	0.4	%	0.2	%	—	%
Commercial automobile	39.9	%	20.9	%	15.1	%	10.9	%	5.6	%	2.8	%	1.8	%	0.1	%	—	%	0.5	%
Commercial workers' compensation	26.1	%	29.0	%	13.6	%	8.1	%	4.3	%	3.2	%	1.8	%	4.5	%	0.8	%	1.9	%
Personal	71.9	%	19.1	%	4.0	%	2.5	%	1.1	%	0.5	%	0.3	%	0.1	%	0.1	%	0.2	%

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STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS

12 Months Ended

Dec. 31, 2017

Statutory Insurance Financial Information [Abstract]

STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS

STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS

Statutory capital and surplus in regards to policyholders at December 31, 2017, 2016 and 2015 and statutory net income (loss) for the years then ended are as follows:

	Statutory Capital and Surplus		Statutory Net Income (Loss)
2017
Property and casualty business	$	757,443	$	19,687
Life, accident and health business	144,533		5,485
2016
Property and casualty business	$	770,908	$	39,087
Life, accident and health business	139,806		(3,177		)
2015
Property and casualty business	$	722,404	$	75,554
Life, accident and health business	138,855		(1,524		)

(1) Because United Fire & Casualty Company owns United Life Insurance Company, the property and casualty statutory capital and surplus includes life, accident and health statutory capital and surplus, and therefore represents our total consolidated statutory capital and surplus.

State insurance holding company laws and regulations generally require approval from the insurer's domicile state insurance Commissioner for any material transaction or extraordinary dividend. For property and casualty insurers, a material transaction is defined as any sale, loan, exchange, transfer or guarantee with an affiliate where the aggregate value of the transaction exceeds 25 percent of the insurer's policyholders' surplus or three percent of its admitted assets (measured at December 31 of the preceding year), whichever is less. For life insurers, a material transaction with an affiliate is defined as a transaction with an aggregate value exceeding three percent of the life insurer's admitted assets (measured at December 31 of the preceding year).

State laws and regulations generally limit the amount of funds that an insurance company may distribute to a parent as a dividend without Commissioner approval. As a holding company with no independent operations of its own, United Fire Group, Inc. relies on dividends received from its insurance company subsidiaries in order to pay dividends to its common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31, or net income of the preceding calendar year on a statutory basis, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at December 31, 2017, our insurance company subsidiary, United Fire & Casualty Company, is able to make a maximum of $35,744 in dividend payments without prior approval. At December 31, 2017, we were in compliance with applicable state laws and regulations. These restrictions will not have a material impact in meeting our cash obligations. In addition, United Fire Group, Inc. maintains a credit agreement, as discussed in Part II, Note 14 "Credit Facility," which permits us to borrow up to an aggregate principal amount of $50,000 and allows the Company to increase the aggregate amount of the commitments thereunder by up to $100,000.

We paid dividends to our common shareholders of $27,337, $24,591 and $21,658 in 2017, 2016 and 2015, respectively. Payments of any future dividends and the amounts of such dividends, however, will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors, out of funds legally available, and subject to any other restrictions that may be applicable to us.

In 2017, 2016 and 2015, United Fire & Casualty Company received dividends from its wholly owned subsidiaries of $13,300, $26,000 and $16,500, respectively. In 2017, 2016 and 2015, United Fire & Casualty Company paid dividends to United Fire Group, Inc. totaling $40,000, $24,000 and $22,500, respectively. These intercompany dividend payments are eliminated for reporting in our Consolidated Financial Statements.

A majority of our custodial assets are subject to a tri-party agreement between one of our subsidiary companies, United Life, the custodian, and the Iowa Insurance Commissioner. Under this agreement, as long as United Life maintains the minimum aggregate value of securities in the account (based on its legal reserve requirements), it is free to invest, withdraw or loan these funds or pay dividends using these funds without approval from the Commissioner. Investment of these funds is subject to the same limitations on asset class and credit quality imposed by the Commissioner on all insurance company invested assets. Investment income derived from these custodied funds is available for general corporate purposes and to satisfy corporate obligations without approval from the Commissioner.

At December 31, 2017, United Life had net admitted assets, on a statutory basis, of $1,497,955, $215,488 in excess of its legal reserve requirement. Therefore, any restriction on funds deposited by United Life with the Iowa Insurance Commissioner would not materially affect its financial position or results of operations and its cash flows are sufficient to meet its operational requirements. Under the material transaction and dividend standards described above, United Life currently is not able to enter into an affiliate transaction and/or pay a dividend without approval from the Commissioner.

Our property and casualty and life insurance subsidiaries are required to prepare and file statutory-basis financial statements in conformity with the National Association of Insurance Commissioners ("NAIC") Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner and/or director. The accounting principles used to prepare these statutory-basis financial statements follow prescribed or permitted accounting practices that differ from GAAP. Prescribed statutory accounting principles include state laws, regulations and general administrative rules issued by the state of domicile, as well as a variety of publications and manuals of the NAIC. Permitted accounting practices encompass all accounting practices not prescribed, but allowed by the state of domicile. No material permitted accounting practices were used to prepare our statutory-basis financial statements during 2017, 2016 and 2015. Statutory accounting principles primarily differ from GAAP in that policy acquisition and certain sales inducement costs are charged to expense as incurred, goodwill is amortized, life insurance reserves are established based on different actuarial assumptions and the values reported for investments, pension obligations and deferred taxes are established on a different basis.

We are directed by the state insurance departments' solvency regulations to calculate a required minimum level of statutory capital and surplus based on insurance risk factors. The risk-based capital results are used by the NAIC and state insurance departments to identify companies that merit regulatory attention or the initiation of regulatory action. Both United Life and United Fire & Casualty Company and its property and casualty insurance subsidiaries and affiliates had statutory capital and surplus in regards to policyholders well in excess of their required levels at December 31, 2017.

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FEDERAL INCOME TAX

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

FEDERAL INCOME TAX

FEDERAL INCOME TAX

The Tax Act was enacted on December 22, 2017. The Tax Act significantly revised the U.S. corporate income tax laws including lowering the U.S. federal corporate tax rate from 35 percent to 21 percent, effective January 1, 2018.

In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of December 31, 2017 we had not completed accounting for the tax effects of enactment of the Tax Act, however for certain items, we have made a reasonable estimate of the effects on our deferred tax balances. For other items where we could not make a reasonable estimate, we are still using existing accounting guidance and the provisions of the tax laws that were in place prior to the enactment. For the items were we were able to determine a reasonable estimate, we recognized a provisional amount in income tax expense from continuing operations of $21,884. The Company will continue to refine this estimated provisional adjustment as we gain a more through understanding of the tax law and the Company will take future guidance into consideration when it becomes available.

Federal income tax expense (benefit) from both continuing and discontinued operations is composed of the following:

Years Ended December 31,	2017			2016		2015
Current	$	1,989		$	3,239	$	37,649
Deferred	(26,719		)	5,524		(5,324		)
Total	$	(24,730	)	$	8,763	$	32,325

A reconciliation of income tax expense (benefit) computed at the applicable federal tax rate of 35.0 percent to the amount recorded in the accompanying Consolidated Statements of Income and Comprehensive Income is as follows:

Years Ended December 31,	2017			2016			2015
Computed expected income tax expense	$	9,202		$	20,533		$	42,508
Impact of enactment of Tax Act	(21,884		)	—			—
Tax-exempt municipal bond interest income	(8,875		)	(8,330		)	(7,669		)
Nontaxable dividend income	(1,540		)	(1,317		)	(1,337		)
Valuation allowance reduction	(547		)	(547		)	(548		)
Other, net	(1,086		)	(1,576		)	(629		)
Consolidated federal income tax expense (benefit)	$	(24,730	)	$	8,763		$	32,325
Reconciliation of consolidated federal income tax expense (benefit) from:
Continuing operations	$	(29,220	)	$	8,379		$	30,050
Discontinued operations	4,490			384			2,275
Consolidated federal income tax expense (benefit)	$	(24,730	)	$	8,763		$	32,325

We remeasure certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which under the new Tax Act is 21.0 percent. However, we are still analyzing certain aspects of the Tax Act which could impact our calculations and the measurement of our deferred tax balances. The significant components of our net deferred tax liability from both continuing and discontinued operations at December 31, 2017 and 2016 are as follows:

December 31,	2017			2016
Deferred tax liabilities
Net unrealized appreciation on investment securities:
Equity securities	$	50,839		$	70,640
All other securities	7,599			3,711
Deferred policy acquisition costs	30,404			52,031
Investments in partnerships	3,653			8,112
Prepaid pension cost	3,416			4,449
Net bond discount accretion	666			1,134
Depreciation	593			854
Revaluation of investment basis (1)	545			1,342
Identifiable intangible assets (1)	1,838			3,311
Other	1,934			2,831
Gross deferred tax liability	$	101,487		$	148,415
Deferred tax assets
Financial statement reserves in excess of income tax reserves	$	17,036		$	29,174
Unearned premium adjustment	19,389			30,697
Net operating loss carryforwards	329			718
Underfunded benefit plan obligation	12,375			13,374
Post-retirement benefits other than pensions	11,942			20,221
Other-than-temporary impairment of investments	2,313			4,658
Contingent ceding commission accrual	317			2,769
Alternative minimum tax credit carryforward	6,011			1,194
Compensation expense related to stock options	3,289			4,578
Other	4,145			6,162
Gross deferred tax asset	$	77,146		$	113,545
Valuation allowance	(329		)	(718		)
Deferred tax asset	$	76,817		$	112,827
Net deferred tax liability	$	24,670		$	35,588

(1) Related to our acquisition of Mercer Insurance Group.

Due to our determination that we may not be able to fully realize the benefits of the net operating losses ("NOLs") acquired in the purchase of American Indemnity Financial Corporation in 1999, which are only available to offset the future taxable income of our property and casualty insurance operations and are further limited as to the amount that can be utilized in any given year, we have recorded a valuation allowance against these NOLs that totaled $329 and $718, respectively, at December 31, 2017 and 2016. Based on a yearly review, we determine whether the benefit of the NOLs can be realized, and, if so, the decrease in the valuation allowance is recorded as a reduction to current federal income tax expense. If NOLs expire during the year, the decrease in the valuation allowance is offset with a corresponding decrease to the deferred income tax asset. The valuation allowance was reduced by $547 during 2017 due to the realization of $1,565 in NOLs, partially offset by a $158 adjustment related to the enactment of the Tax Act, for a net reduction of $389. The valuation allowance was reduced by $547 in 2016 due to the realization of $1,565 in NOLs. No portion of the NOLs expired in 2017 and $1,565 will expire in 2018. At December 31, 2017, we had $6,011 of alternative minimum tax credit carryforwards.

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EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

We offer various benefits to our employees including a noncontributory defined benefit pension plan, an employee/retiree health and dental benefit plan, a profit-sharing plan and an employee stock ownership plan.

Pension and Post-retirement Benefit Plans

We offer a noncontributory defined benefit pension plan in which all of our employees are eligible to participate after they have completed one year of service, attained 21 years of age and have met the hourly service requirements. Retirement benefits under our pension plan are based on the number of years of service and level of compensation. Our policy to fund the pension plan on a current basis to not less than the minimum amounts required by the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended, is to assure that plan assets will be adequate to provide retirement benefits. We estimate that we will contribute approximately $6,400 to the pension plan in 2018.

We also offer a health and dental benefit plan to all of our eligible employees and retirees that consists of two programs: (1) the self-funded employee health and dental benefit plan and (2) the self-funded (pre-65) and fully-funded (post-65) retiree health and dental benefit plan (the "post-retirement benefit plan"). Effective January 1, 2017, there was a plan amendment, which included the following changes: eliminated the pre-65 retirement plan with a $500 hundred dollar deductible; for retirements after January 1, 2017, the retiree will pay 50 percent of the lower cost supplemental plan if they are 65 or older and 100 percent of the premium if less than 65; and removed spousal coverage after the death of the participant. The financial impact of the changes were reflected in accumulated other comprehensive income at December 31, 2016.

The post-retirement benefit plan provides health and dental benefits to our retirees (and covered dependents) who have met the service and participation requirements stipulated by the post-retirement benefit plan. The third party administrators for the post-retirement benefit plan are responsible for making medical and dental care benefit payments. Participants are required to submit claims for reimbursement or payment to the claims administrator within twelve months after the end of the calendar year in which the charges were incurred. An unfunded benefit obligation is reported for the post-retirement benefit plan in the accompanying Consolidated Balance Sheets.

Investment Policies and Strategies

Our investment policy and objective for the pension plan is to generate long-term capital growth and income by way of a diversified investment portfolio along with appropriate employer contributions, which will allow us to provide for the pension plan's benefit obligation.

The investments held by the pension plan at December 31, 2017 include the following asset categories:

• Fixed income securities, which may include bonds, and convertible securities;

• Equity securities, which may include various types of stock, such as large-cap, mid-cap, small-cap, and international stocks;

• Pooled separate accounts, which includes two separate funds, a core plus bond separate account and a real estate separate account;

• An arbitrage fund, which is a fund that takes advantage of price discrepancies, primarily equity securities, for the same asset in different markets;

• A group annuity contract that is administered by United Life, a subsidiary of United Fire; and

• Cash and cash equivalents, which include money market funds.

We have an internal investment/retirement committee, which includes our Chief Executive Officer, Chief Investment Officer, and Chief Operating Officer, all of whom receive monthly information on the value of the pension plan assets and their performance. Quarterly, the committee meets to review and discuss the performance of the pension plan assets as well as the allocation of investments within the pension plan.

As of December 31, 2017, we had six external investment managers that are allowed to exercise investment discretion, subject to limitations, if any, established by the investment/retirement committee. We utilize multiple investment managers in order to maximize the pension plan's investment return while mitigating risk. None of our investment managers uses leverage in managing the pension plan. Annually, the investment/retirement committee meets with each investment manager to review the investment manager's goals, objectives and the performance of the assets they manage. The decision to establish or terminate a relationship with an investment manager is at the discretion of our investment/retirement committee.

We consider historical experience for comparable investments and the target allocations we have established for the various asset categories of the pension plan to determine the expected long-term rate of return, which is an assumption as to the average rate of earnings expected on the pension plan funds invested, or to be invested, by the pension plan, to provide for the settlement of benefits included in the projected pension benefit obligation. Investment securities, in general, are exposed to various risks, such as fluctuating interest rates, credit standing of the issuer of the security and overall market volatility. Annually, we perform an analysis of expected long-term rates of return based on the composition and allocation of our pension plan assets and recent economic conditions.

The following is a summary of the pension plan's actual and target asset allocations at December 31, 2017 and 2016 by asset category:

									Target
Pension Plan Assets	2017		% of Total		2016		% of Total		Allocation
Fixed maturity securities - corporate bonds	$	11,003	7.0	%	$	9,451	7.4	%	0	%	-	15	%
Redeemable preferred stock	3,216		2.0		3,144		2.4		0	%	-	10	%
Equity securities	87,603		55.6		69,770		54.3		50	%	-	70	%
Pooled separate accounts
Core plus bond separate account fund	17,948		11.4		10,401		8.1		0	%	-	40	%
U.S. property separate account fund	15,502		9.8		14,330		11.1		0	%	-	25	%
Arbitrage fund	8,506		5.4		8,292		6.5		0	%	-	10	%
United Life annuity	9,846		6.2		9,377		7.3		5	%	-	10	%
Cash and cash equivalents	4,020		2.6		3,665		2.9		0	%	-	10	%
Total plan assets	$	157,644	100.0	%	$	128,430	100.0	%

The investment return expectations for the pension plan are used to develop the asset allocation based on the specific needs of the pension plan. Accordingly, equity securities comprise the largest portion of our pension plan assets, as they yield the highest rate of return. The United Life annuity, which is the fifth largest asset category and was originally written by our life insurance subsidiary in 1976, provides a guaranteed rate of return. The interest rate on the group annuity contract is determined annually.

The availability of assets held in cash and cash equivalents enables the pension plan to mitigate market risk that is associated with other types of investments and allows the pension plan to maintain liquidity both for the purpose of making future benefit payments to participants and their beneficiaries and for future investment opportunities.

Valuation of Investments

Fixed Maturity and Equity Securities

Investments in equity securities are stated at fair value based upon quoted market prices reported on recognized securities exchanges on the last business day of the year. Purchases and sales of securities are recorded as of the trade date.

The fair value of fixed maturity securities categorized as Level 2 is determined by management based on fair value

information reported in the custodial statements received from Plan’s investment managers, which is derived from

recent trading activity of the underlying security in the financial markets. These securities represent various taxable bonds held by the pension plan. These securities categorized as Level 2 are valued in the same manner as described in Part II, Item 8, Note 3 and have the same controls in place.

Pooled Separate Accounts

The pension plan invests in two pooled separate account funds, a core plus bond separate account fund and a U.S. property separate account fund. Investments in the core plus bond separate account fund are stated at fair value as provided by the administrator of the fund based on the fair value of the underlying assets owned by the fund. The fair value measurement is classified within Level 2 of the fair value hierarchy. The fair value of the investments in the U.S. property separate account fund is provided by the administrator of the fund based on the net asset value of the fund. The net asset value is based on the fair value of the underlying properties included in the fund. The fair value of the underlying properties are based on property appraisals conducted by an independent third party. The fair value measurement is classified within Level 3 of the fair value hierarchy. We have not adjusted the net asset value provided by the custodian for either fund.

Arbitrage Fund

The fair value of the arbitrage fund is determined based on its net asset value, which is obtained from the custodian and determined monthly with issuances and redemptions of units of the fund made, based on the net asset value per unit as determined on the valuation date. We have not adjusted the net asset value provided by the custodian.

United Life Annuity

The United Life group annuity contract, which is a deposit administration contract, is stated at contract value as determined by United Life. Under the group annuity contract, the plan's investment account is credited with compound interest on the average account balance for the year. The interest rate is equivalent to the ratio of net investment income to mean assets of United Life, net of investment expenses.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of insured cash and money market funds held with various financial institutions. Interest is earned on a daily basis. The fair value of these funds approximates their cost basis due to their short-term nature.

Fair Value Measurement

The following tables present the categorization of the pension plan's assets measured at fair value on a recurring basis at December 31, 2017 and 2016:

			Fair Value Measurements
Description	December 31, 2017		Level 1		Level 2		Level 3
Fixed maturity securities - corporate bonds	$	11,003	$	—	$	11,003	$	—
Redeemable preferred stock	3,216		3,216		—		—
Equity securities	87,603		87,603		—		—
Pooled separate accounts
Core plus bond separate account fund	17,948		—		17,948		—
U.S. property separate account fund	15,502		—		—		15,502
Arbitrage fund	8,506		—		8,506		—
Money market funds	4,011		4,011		—		—
Total assets measured at fair value	$	147,789	$	94,830	$	37,457	$	15,502

			Fair Value Measurements
Description	December 31, 2016		Level 1		Level 2		Level 3
Fixed maturity securities - corporate bonds	$	9,451	$	—	$	9,451	$	—
Redeemable preferred stock	3,144		3,144		—		—
Equity securities	69,770		69,770		—		—
Pooled separate accounts
Core plus bond separate account fund	10,401		—		10,401		—
U.S. property separate account fund	14,330		—		—		14,330
Arbitrage fund	8,292		—		8,292		—
Money market funds	3,659		3,659		—		—
Total assets measured at fair value	$	119,047	$	76,573	$	28,144	$	14,330

There were no transfers of assets in or out of Level 1 or Level 2 during the period.

The fair value of investments categorized as Level 1 is based on quoted market prices that are readily and regularly available.

The fair value of fixed maturity securities categorized as Level 2 is determined by management based on fair value information reported in the custodial statements, which is derived from recent trading activity of the underlying security in the financial markets. These securities represent various taxable bonds held by the pension plan. These securities categorized as Level 2 are valued in the same manner as described in Part II, Item 8, Note 3 and have the same controls in place.

The fair value of the arbitrage fund and bond and mortgage pooled separate account fund are categorized as Level 2 since there are no restrictions as to the pension plan's ability to redeem its investment at the net asset value of the fund as of the reporting date.  

The following tables provide a summary of the changes in fair value of the pension plan's Level 3 securities:

	U.S. property separate account fund
Balance at January 1, 2017	$	14,330
Unrealized gains	1,172
Balance at December 31, 2017	$	15,502

	U.S. property separate account fund
Balance at January 1, 2016	$	11,252
Unrealized gains	1,078
Purchases	2,000
Balance at December 31, 2016	$	14,330

Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31. In estimating the discount rate, we look to rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of the respective plan's benefit obligations.

In October 2014, the Society of Actuaries finalized a new mortality table and a new mortality improvement scale. The mortality improvement scale was further refined by the Society of Actuaries in 2015, 2016 and 2017. These updated tables reflect improved life expectancies and an expectation that the trend will continue. We have reviewed these updated tables and have updated the mortality assumptions based on this information and also based on research provided by our external actuaries. We will continue to monitor mortality assumptions and make changes as appropriate to reflect additional research and our resulting best estimate of future mortality rates.

Assumptions Used to Determine Benefit Obligations

The following actuarial assumptions were used to determine the reported plan benefit obligations at December 31:

Weighted-average assumptions as of	Pension Benefits				Post-retirement Benefits
December 31,	2017		2016		2017		2016
Discount rate	3.65	%	4.17	%	3.65	%	4.17	%
Rate of compensation increase	3.00		3.00		N/A		N/A

Decreasing interest rates resulted in a decrease in the discount rates we use to value our respective plan's benefit obligations at December 31, 2017 compared to December 31, 2016.

Assumptions Used to Determine Net Periodic Benefit Cost

The following actuarial assumptions were used at January 1 to determine our reported net periodic benefit costs for the year ended December 31:

Weighted-average assumptions as of	Pension Benefits						Post-retirement Benefits
January 1,	2017		2016		2015		2017		2016		2015
Discount rate	4.17	%	4.21	%	3.86	%	4.17	%	4.21	%	3.86	%
Expected long-term rate of return on plan assets	7.50		7.50		7.50		N/A		N/A		N/A
Rate of compensation increase	3.00		3.00		3.00		N/A		N/A		N/A

Assumed Health Care Cost Trend Rates

	Health Care Benefits				Dental Claims
Years Ended December 31,	2017		2016		2017		2016
Health care cost trend rates assumed for next year	7.00	%	7.00	%	4.00	%	4.00	%
Rate to which the health care trend rate is assumed to decline (ultimate trend rate)	4.50	%	4.50	%	N/A		N/A
Year that the rate reaches the ultimate trend rate	2026		2025		N/A		N/A

Assumed health care cost trend rates have a significant effect on the amounts reported for the post-retirement benefit plan. A 1.0 percent change in assumed health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
Effect on the net periodic post-retirement health care benefit cost	$	1,126	$	(883	)
Effect on the accumulated post-retirement benefit obligation	9,487		(7,698		)

Benefit Obligation and Funded Status

The following table provides a reconciliation of benefit obligations, plan assets and funded status of our plans:

	Pension Benefits						Post-retirement Benefits
Years Ended December 31,	2017			2016			2017			2016
Reconciliation of benefit obligation
Benefit obligation at beginning of year	$	171,876		$	160,390		$	46,785		$	72,175
Service cost	6,857			6,490			2,021			3,728
Interest cost	7,060			6,654			1,927			3,015
Actuarial loss	26,963			2,215			6,326			1,468
Adjustment for plan amendment	—			—			—			(32,289		)
Benefit payments	(4,407		)	(3,873		)	(1,331		)	(1,312		)
Benefit obligation at end of year (1)	$	208,349		$	171,876		$	55,728		$	46,785
Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year	$	128,430		$	106,600		$	—		$	—
Actual return on plan assets	22,225			9,320			—			—
Employer contributions	11,396			16,383			1,331			1,311
Benefit payments	(4,407		)	(3,873		)	(1,331		)	(1,311		)
Fair value of plan assets at end of year	$	157,644		$	128,430		$	—		$	—
Funded status at end of year	$	(50,705	)	$	(43,446	)	$	(55,728	)	$	(46,785	)

(1) For the pension plan, the benefit obligation is the projected benefit obligation. For the post-retirement benefit plan, the benefit obligation is the accumulated post-retirement benefit obligation.

Our accumulated pension benefit obligation was $184,436 and $152,620 at December 31, 2017 and 2016, respectively.

The following table displays the effect that the unrecognized prior service cost and unrecognized actuarial loss of our plans had on accumulated other comprehensive income ("AOCI"), as reported in the accompanying Consolidated Balance Sheets:

	Pension Benefits				Post-retirement Benefits
Years Ended December 31	2017		2016		2017			2016
Amounts recognized in AOCI
Unrecognized prior service cost	$	—	$	—	$	(26,880	)	$	(32,289	)
Unrecognized actuarial (gain) loss	60,571		49,745		25,235			20,756
Total amounts recognized in AOCI	$	60,571	$	49,745	$	(1,645	)	$	(11,533	)

We anticipate amortization of the net actuarial losses for our pension plan in 2018 to be $4,287. We anticipate amortization of the net actuarial losses for our post-retirement benefit plan in 2018 to be $2,355.

Net Periodic Benefit Cost

The components of the net periodic benefit cost for our pension and post-retirement benefit plans are as follows:

	Pension Plan									Post-retirement Benefit Plan
Years Ended December 31,	2017			2016			2015			2017			2016		2015
Net periodic benefit cost
Service cost	$	6,857		$	6,490		$	6,675		$	2,021		$	3,728	$	5,220
Interest cost	7,060			6,654			5,999			1,927			3,015		2,856
Expected return on plan assets	(9,650		)	(7,952		)	(7,800		)	—			—		—
Amortization of prior service cost	—			—			—			(5,409		)	—		—
Amortization of net loss	3,562			3,968			4,546			1,846			1,518		2,920
Net periodic benefit cost	$	7,829		$	9,160		$	9,420		$	385		$	8,261	$	10,996

Projected Benefit Payments

The following table summarizes the expected benefits to be paid from our plans over the next 10 years:

	2018		2019		2020		2021		2022		2023 - 2027
Pension benefits	$	5,620	$	6,140	$	6,780	$	7,520	$	8,240	$	52,950
Post-retirement benefits	$	1,350	$	1,540	$	1,700	$	1,880	$	2,050	$	13,310

Profit-Sharing Plan and Employee Stock Ownership Plan

We have a profit-sharing plan in which employees who meet service requirements are eligible to participate. The amount of our contribution is discretionary and is determined annually, but cannot exceed the amount deductible for federal income tax purposes. Our contribution to the profit-sharing plan for 2017, 2016 and 2015, was $4,987, $2,904 and $7,706, respectively.

Prior to October 31, 2015 we had an employee stock ownership plan (the "ESOP") for the benefit of eligible employees and their beneficiaries. In June 2015, the plan administrator decided to merge the ESOP into the United Fire Group, Inc. 401K Plan effective October 31, 2015. Participant ESOP account balances were transferred to each participant’s 401K Plan.

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STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Non-Qualified Employee Stock Award Plan

The United Fire Group, Inc. 2008 Stock Plan (the "2008 Stock Plan") authorized the issuance of restricted and unrestricted stock awards, stock appreciation rights, incentive stock options, and non-qualified stock options for up to 1,900,000 shares of United Fire common stock to employees. In May 2014, the Registrant's shareholders approved an additional 1,500,000 shares of United Fire common stock issuable at any time and from time to time pursuant to the 2008 Stock Plan, among other amendments, and renamed such plan as the United Fire Group, Inc. Stock Plan, (as amended, the "Stock Plan"). At December 31, 2017, there were 996,828 authorized shares remaining available for future issuance. The Stock Plan is administered by the Board of Directors, which determines those employees who will receive awards, when awards will be granted, and the terms and conditions of the awards. The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Stock Plan. Pursuant to the Stock Plan, the Board of Directors may, at its sole discretion, grant awards to our employees who are in positions of substantial responsibility with United Fire.

Options granted pursuant to the Stock Plan are granted to buy shares of United Fire's common stock at the market value of the stock on the date of grant. All outstanding option awards vest and are exercisable in installments of 20.0 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. To the extent not exercised, vested option awards accumulate and are exercisable by the awardee, in whole or in part, in any subsequent year included in the option period, but not later than 10 years from the grant date. Restricted and unrestricted stock awards granted pursuant to the Stock Plan are granted at the market value of our common stock on the date of the grant. Restricted stock awards fully vest after 3 years or 5 years from the date of issuance, unless accelerated upon the approval of the Board of Directors, at which time United Fire common stock will be issued to the awardee. All awards are generally granted free of charge to the eligible employees of United Fire as designated by the Board of Directors.

The activity in the Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Year Ended December 31, 2017		From Inception to December 31, 2017
Beginning balance	1,248,651		1,900,000
Additional shares authorized	—		1,500,000
Number of awards granted	(259,405	)	(2,871,971	)
Number of awards forfeited or expired	7,582		468,799
Ending balance	996,828		996,828
Number of option awards exercised	136,827		1,085,895
Number of unrestricted stock awards granted	1,145		8,470
Number of restricted stock awards vested	1,198		38,168

Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan

The United Fire Group, Inc. 2005 Non-Qualified Non-Employee Director Stock Option and Restricted Stock Plan (the "Director Plan") authorizes the issuance of restricted stock awards and non-qualified stock options to purchase shares of United Fire's common stock to non-employee directors. At December 31, 2017, we had 61,813 authorized shares available for future issuance.

The Board of Directors has the authority to determine which non-employee directors receive awards, when options and restricted stock shall be granted, the option price, the option expiration date, the date of grant, the vesting schedule of options or whether the options shall be immediately vested, the terms and conditions of options and restricted stock (other than those terms and conditions set forth in the plan) and the number of shares of common stock to be issued pursuant to an option agreement or restricted stock agreement (subject to limits set forth in the plan). The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Director Plan.

The activity in the Director Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Year Ended December 31, 2017		From Inception to December 31, 2017
Beginning balance	74,771		300,000
Number of awards granted	(12,958	)	(262,190	)
Number of awards forfeited or expired	—		24,003
Ending balance	61,813		61,813
Number of option awards exercised	36,808		89,281
Number of restricted stock awards vested	22,716		54,272

Stock-Based Compensation Expense

In 2017, 2016 and 2015, we recognized stock-based compensation expense of $4,808, $3,696 and $2,510, respectively. Stock-based compensation expense is recognized over the vesting period of the stock options.

As of December 31, 2017, we had $8,350 in stock-based compensation expense that has yet to be recognized through our results of operations. We expect this compensation to be recognized in subsequent years according to the following table, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated.

2018	$	4,028
2019	2,776
2020	1,116
2021	390
2022	40
Total	$	8,350

Analysis of Award Activity

The analysis below details the award activity for 2017 and the awards outstanding at December 31, 2017, for both of our plans and ad hoc options, which were granted prior to the adoption of the other plans:

Options	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Life (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	1,120,677		$	29.08
Granted	159,709		41.75
Exercised	(173,635	)	27.52
Forfeited or expired	(5,700	)	28.66
Outstanding at December 31, 2017	1,101,051		$	31.16	6.52	$	15,875
Exercisable at December 31, 2017	495,089		$	26.77	3.22	$	9,311

Intrinsic value is the difference between our share price on the last day of trading (i.e., December 31, 2017) and the price of the options when granted and represents the value that would have been received by option holders had they exercised their options on that date. These values change based on the fair market value of our shares. The intrinsic value of options exercised totaled $3,159, $4,339 and $1,546 in 2017, 2016 and 2015, respectively.

The analysis below details the award activity for the restricted stock and restricted stock unit awards outstanding at December 31, 2017:

Restricted stock awards	Shares		Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2017	182,086		$	34.08
Granted	111,509		41.94
Vested	(23,914	)	36.77
Forfeited	(1,882	)	40.27
Non-vested at December 31, 2017	267,799		$	37.07

In 2017, 2016 and 2015 we recognized $2,987, $1,766 and $924, respectively, in compensation expense related to the restricted stock and restricted stock unit awards. At December 31, 2017, we had $5,107 in compensation expense that has yet to be recognized through our results of operations related to the restricted stock and restricted stock unit awards. The intrinsic value of the non-vested restricted stock and restricted stock unit awards outstanding totaled $2,279, $2,747 and $1,520 at December 31, 2017, 2016 and 2015, respectively.

Assumptions

The weighted-average grant-date fair value of the options granted under our plans has been estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

December 31,	2017			2016			2015
Risk-free interest rate	2.23		%	1.53		%	1.94		%
Expected volatility	27.58		%	25.44		%	21.92		%
Expected option life (in years)	7			7			7
Expected dividends (in dollars)	$	1.00		$	0.88		$	0.80
Weighted-average grant-date fair value of options granted during the year (in dollars)	$	9.93		$	8.42		$	4.98

The following table summarizes information regarding the stock options outstanding and exercisable at December 31, 2017:

				Options Outstanding				Options Exercisable
Range of Exercise Prices				Number Outstanding (in shares)	Weighted-Average Remaining Contractual Life (in years)	Weighted-Average Exercise Price		Number Exercisable (in shares)	Weighted-Average Exercise Price
$	15.01	-	21.00	100,805	3.23	$	20.24	100,805	$	20.24
21.01		-	28.00	159,478	4.52	23.38		127,077	23.23
28.01		-	35.00	508,630	6.42	29.49		235,833	29.74
35.01		-	43.00	332,138	8.63	40.77		31,374	39.84
$	15.01	-	43.00	1,101,051	6.52	$	31.16	495,089	$	26.77

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SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

On September 19, 2017, the Company announced that it had agreed to sell its subsidiary, United Life Insurance Company, to Kuvare. As a result, our life insurance business has been considered held for sale and reported as discontinued operations in the Consolidated Financial Statements and all comparable prior periods have been presented to conform to the current year presentation. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval. For more information, refer to Note 17. "Discontinued Operations."

Prior to the announcement to sell our subsidiary, United Life Insurance Company, we had two reportable business segments in our operations: property and casualty insurance and life insurance. The property and casualty insurance business has six domestic locations from which it conducts its business. The life insurance business operates from our home office. Because all of our insurance is sold domestically, we have no revenues allocable to foreign operations.

After the announcement of the sale of our life insurance business, the Company has a single reportable segment, the property and casualty insurance business, which includes all continuing operations. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. The property and casualty insurance business geographic concentration did not change after the announcement of the sale of the life insurance business. We will continue to evaluate our segment on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP.

The accounting policies of our businesses are the same as those described in Note 1 to our Consolidated Financial Statements. We analyze results based on profitability (i.e., loss ratios), expenses and return on equity.

Property and Casualty Insurance Business

We write both commercial and personal lines of property and casualty insurance. We focus on our commercial lines, which represented 92.9% of our property and casualty insurance premiums earned for 2017. Our personal lines represented 7.1% of our property and casualty insurance premiums earned for 2017.

Products

Our primary commercial policies are tailored business packages that include the following coverages: fire and allied lines, other liability, automobile, workers' compensation and surety. Our personal lines consist primarily of automobile and fire and allied lines coverage, including homeowners.

Pricing

Pricing levels for our property and casualty insurance products are influenced by many factors, including an estimation of expected losses, the expenses of producing, issuing and servicing business and managing claims, the time value of money associated with such loss and expense cash flows, and a reasonable allowance for profit. We have a disciplined approach to underwriting and risk management that emphasizes profitable growth rather than premium volume or market share. Our insurance company subsidiaries are subject to state laws and regulations regarding rate and policy form approvals. The applicable state laws and regulations establish standards in certain lines of business to ensure that rates are not excessive, inadequate, unfairly discriminatory, or used to engage in unfair price competition. Our ability to increase rates and the relative timing of the process are dependent upon each respective state's requirements, as well as the competitive market environment.

Seasonality

Our property and casualty insurance business experiences some seasonality with regard to premiums written, which are generally highest in January and July and lowest during the fourth quarter. Although we experience some seasonality in our premiums written, premiums are earned ratably over the period of coverage. Losses and loss settlement expenses incurred tend to remain consistent throughout the year, with the exception of catastrophe losses which generally are highest in the second and third quarters. Catastrophes inherently are unpredictable and can occur at any time during the year from man-made or natural disaster events that include, but are not limited to, hail, tornadoes, hurricanes and windstorms.

Premiums Earned

The following table sets forth our net premiums earned:

Years Ended December 31,	2017		2016		2015
Continuing Operations - Property and casualty insurance business
Net premiums earned
Other liability	$	306,480	$	289,982	$	261,303
Fire and allied lines	270,716		265,221		246,450
Automobile	277,511		239,216		210,090
Workers' compensation	104,166		103,605		95,672
Fidelity and surety	24,981		22,507		21,362
Reinsurance assumed	10,650		12,765		13,639
Other	2,988		2,835		3,179
Total net premiums earned from continuing operations	$	997,492	$	936,131	$	851,695
Discontinued Operations - Life insurance business
Net premiums earned
Ordinary life (excluding universal life)	$	35,388	$	63,668	$	53,114
Universal life policy fees	13,145		11,577		12,834
Immediate annuities with life contingencies	11,691		10,533		12,223
Accident and health	1,096		1,434		1,425
Other	48		58		388
Total net premiums earned from discontinued operations	$	61,368	$	87,270	$	79,984

Total revenue includes sales to external customers and intercompany sales that are eliminated to arrive at the total revenues as reported in the accompanying Consolidated Statements of Income and Comprehensive Income. We account for intercompany sales on the same basis as sales to external customers.

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QUARTERLY SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Data [Abstract]

QUARTERLY SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth our selected unaudited quarterly financial information from continuing operations:

(In Thousands Except Share Data)
Quarters	First		Second			Third			Fourth		Total
Year Ended December 31, 2017
Total revenues	$	251,278	$	258,487		$	269,617		$	273,355	$	1,052,737
Income (loss) before income taxes	23,006		(4,331		)	(32,394		)	29,369		15,650
Net income (loss)	$	18,584	$	109		$	(19,082	)	$	45,259	$	44,870
Basic earnings per share (1)	$	0.73	$	—		$	(0.77	)	$	1.81	$	1.79
Diluted earnings per share (1)	0.72		—			(0.77		)	1.78		1.75
Year Ended December 31, 2016
Total revenues	$	231,334	$	244,866		$	255,625		$	264,537	$	996,362
Income before income taxes	28,165		1,372			14,035			13,925		57,497
Net income	$	22,020	$	3,435		$	11,628		$	12,035	$	49,118
Basic earnings per share (1)	$	0.87	$	0.13		$	0.46		$	0.46	$	1.94
Diluted earnings per share (1)	0.86		0.13			0.45			0.46		1.90

(1) The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.

The following table sets forth our selected unaudited quarterly financial information from discontinued operations:

(In Thousands Except Share Data)
Quarters	First		Second			Third		Fourth			Total
Year Ended December 31, 2017
Total revenues	$	31,781	$	28,492		$	27,054	$	28,386		$	115,713
Income before income taxes	2,083		4,386			1,880		2,294			10,643
Net income	$	1,352	$	2,849		$	1,218	$	734		$	6,153
Basic earnings per share (1)	$	0.05	$	0.11		$	0.05	$	0.03		$	0.24
Diluted earnings per share (1)	0.05		0.11			0.05		0.03			0.24
Year Ended December 31, 2016
Total revenues	$	34,351	$	34,907		$	33,869	$	37,458		$	140,585
Income (loss) before income taxes	609		(508		)	1,140		(71		)	1,170
Net income (loss)	$	407	$	(321	)	$	740	$	(40	)	$	786
Basic earnings per share (1)	$	0.02	$	(0.01	)	$	0.03	$	—		$	0.03
Diluted earnings per share (1)	0.02		(0.01		)	0.03		—			0.03

(1) The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.

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EARNINGS PER COMMON SHARE

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options and restricted stock awards.

We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.

The components of basic and diluted earnings per share were as follows:

	Years Ended December 31,
	2017				2016				2015
(In Thousands Except Share and Per Share Data)	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income from continuing operations	$	44,870	$	44,870	$	49,118	$	49,118	$	85,320	$	85,320
Weighted-average common shares outstanding	25,103,720		25,103,720		25,335,706		25,335,706		25,047,405		25,047,405
Add dilutive effect of restricted stock awards	—		250,530		—		155,059		—		122,840
Add dilutive effect of stock options	—		286,354		—		313,913		—		65,751
Weighted-average common shares	25,103,720		25,640,604		25,335,706		25,804,678		25,047,405		25,235,996
Earnings per common share from continuing operations	$	1.79	$	1.75	$	1.94	$	1.90	$	3.41	$	3.38
Earnings per common share from discontinued operations	0.24		0.24		0.03		0.03		0.15		0.15
Earnings per common share	$	2.03	$	1.99	$	1.97	$	1.93	$	3.56	$	3.53
Awards excluded from diluted calculation(1)	—		—		—		—		—		343,390

(1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.

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LEASE COMMITMENTS

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

LEASE COMMITMENTS

LEASE COMMITMENTS

At December 31, 2017, we were obligated under noncancelable operating lease agreements for office space, vehicles, computer equipment and office equipment. Most of our leases include renewal options, purchase options or both. These provisions may be exercised by us upon the expiration of the related lease agreements. Rental expense under our operating lease agreements was $7,197, $6,908 and $6,256 for 2017, 2016 and 2015, respectively. Our most significant lease commitment is for mainframe computer equipment. This lease was signed in November 2016 and has a term of 5 years. The monthly lease payments for this lease are $154.

At December 31, 2017, our future minimum rental payments were as follows:

2018	$	6,435
2019	6,027
2020	5,529
2021	3,173
2022	643
Thereafter	718
Total	$	22,525

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CREDIT FACILITY

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

CREDIT FACILITY

CREDIT FACILITY

On February 2, 2016, the Company, as borrower, entered into a Credit Agreement (the "Credit Agreement") by and among the Company, with the lenders from time to time party thereto and KeyBank National Association ("Key Bank"), as administrative agent, swingline lender and letter of credit issuer. The Credit Agreement provides for a $50,000four-year unsecured revolving credit facility that includes a $20,000 letter of credit subfacility and a swingline subfacility in the amount up to $5,000. The Credit Agreement allows the Company to increase the aggregate amount of the commitments thereunder by up to $100,000, provided that no event of default has occurred and is continuing and certain other conditions are satisfied.

The Credit Agreement is available for the Company's general corporate purposes, including liquidity, acquisitions and working capital. All unpaid principal and accrued interest under the Credit Agreement is due and payable in full at maturity on February 2, 2020. Based on the type of loan, advances under the Credit Agreement would bear interest on either the London interbank offered rate ("LIBOR") or a base rate plus, in each case, a calculated margin amount.

The unused commitments under the Credit Agreement will be subject to a commitment fee that will be calculated at a per annum rate. The applicable margins for borrowings under the Credit Agreement and the commitment fee thereunder will be determined by reference to a pricing grid based on the Company’s issuer credit rating by A.M. Best Company, Inc.

The Credit Agreement contains customary representations, conditions to borrowing, covenants and events of default, including certain covenants that limit or restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to sell or transfer assets, enter into a merger or consolidate with another company, create liens, impose restrictions on subsidiary dividends, enter into sale-leaseback transactions, make investments or acquisitions, enter into certain reinsurance agreements, pay dividends during any period of default, enter into transactions with affiliates, change the nature of its business, or incur indebtedness. The Credit Agreement also includes financial covenants that require the Company to (i) maintain a minimum consolidated net worth, (ii) maintain a minimum consolidated statutory surplus and (iii) not exceed a 0.35 to 1.0 debt to total capitalization ratio. As of December 31, 2017 we were in compliance with all covenants of the Credit Agreement.

There was no outstanding balance on the Credit Agreement at December 31, 2017 or 2016. We did not incur any interest expense related to the Credit Agreement in 2017, 2016 or under our prior credit facility in 2015.

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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETS

The carrying value of our goodwill was $15,091 at both December 31, 2017 and 2016, respectively. The goodwill is fully allocated to our property and casualty insurance business.

Our major classes of intangible assets are presented in the following table:

	Year Ended December 31,
	2017			2016
Agency relationships	$	10,338		$	10,338
Accumulated amortization - agency relationships	(5,566		)	(4,929		)
	$	4,772		$	5,409
Software	$	3,260		$	3,260
Accumulated amortization - software	(3,260		)	(3,260		)
	$	—		$	—
Trade names	$	1,978		$	1,978
Accumulated amortization - trade names	(890		)	(758		)
	$	1,088		$	1,220
Favorable contract	$	286		$	286
Accumulated amortization - favorable contract	(286		)	(286		)
	$	—		$	—
State insurance licenses (1)	$	3,020		$	3,020
Net intangible assets	$	8,880		$	9,649

(1) The intangible asset for licenses has an indefinite life and therefore is not amortized.

The estimated useful lives assigned to our major classes of amortizable intangible assets are as follows:

	Useful Life
Agency relationships	Fifteen years
Software	Two years
Trade names	Fifteen years
Favorable contract	Two years

Our estimated aggregate amortization expense for each of the next five years is as follows:

2018	$	719
2019	709
2020	709
2021	709
2022	709

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ACCUMULATED OTHER COMPREHENSIVE INCOME

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2017, 2016 and 2015:

				Liability for
	Net unrealized			underfunded
	appreciation			employee
	on investments			benefit costs			Total
Balance as of January 1, 2015	$	149,623		$	(58,450	)	$	91,173
Change in accumulated other comprehensive income before reclassifications	(18,321		)	5,664			(12,657		)
Reclassification adjustments from accumulated other comprehensive income	(2,933		)	4,854			1,921
Balance as of December 31, 2015	$	128,369		$	(47,932	)	$	80,437
Change in accumulated other comprehensive income before reclassifications	8,461			19,529			27,990
Reclassification adjustments from accumulated other comprehensive income	(2,938		)	3,566			628
Balance as of December 31, 2016	$	133,892		$	(24,837	)	$	109,055
Change in accumulated other comprehensive income before reclassifications	48,467			(19,878		)	28,589
Reclassification adjustments from accumulated other comprehensive income	(4,152		)	3,514			(638		)
Accumulated effect of change in enacted tax rate	36,658			(5,350		)	31,308
Balance as of December 31, 2017	$	214,865		$	(46,551	)	$	168,314

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DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On September 18, 2017, we signed a definitive agreement to sell our subsidiary, United Life Insurance Company, to Kuvare for $280,000 in cash, subject to specified adjustments as set forth in the definitive agreement. As a result, our life insurance business (previously reported as a separate segment) has been considered held for sale and reported as discontinued operations and its financial position, results of operations and cash flows are separately reported for all periods presented, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval.

Subsequent to the close of the sale in the first half of 2018, UFG will provide services to Kuvare through a transition services agreement ("TSA"). The TSA will be put in place to ensure a seamless transfer of the business between UFG and Kuvare. The TSA includes, among other services, accounting management, human resources, legal and information technology services, from the closing date for up to 24 months.

The assets and liabilities associated with discontinued operations prior to the closing of the sale have been presented separately in our Consolidated Balance Sheets. The major assets and liability categories were as follows as of the dates indicated:

Discontinued Operations
Balance Sheets
	December 31,
(In Thousands, Except Share Data)	2017		2016
Assets
Investments
Fixed maturities
Held-to-maturity, at amortized cost (fair value $34 in 2017 and $49 in 2016)	$	34	$	48
Available-for-sale, at fair value (amortized cost $1,412,291 in 2017 and $1,429,270 in 2016)	1,430,025		1,444,840
Equity Securities available-for-sale, at fair value (cost $5,099 in 2017 and $8,510 in 2016)	23,653		24,046
Mortgage loans	3,435		3,706
Policy loans	5,815		5,366
Other long-term investments	16,437		15,870
	1,479,399		1,493,876
Cash and cash equivalents	15,851		21,659
Deferred policy acquisition costs	71,151		70,750
Other assets	19,733		19,333
Total assets held for sale	$	1,586,134	$	1,605,618
Liabilities
Future policy benefits and losses	$	1,320,401	$	1,350,503
Deferred income taxes	18,716		27,739
Accrued expenses and other liabilities	8,018		11,981
Total liabilities held for sale	$	1,347,135	$	1,390,223

Summary operating results of discontinued operations were as follows for the periods indicated:

Discontinued Operations
Statements of Income
	For the Years Ended December 31,
(In Thousands, Except Share Data)	2017		2016		2015
Revenues
Net premiums earned	$	61,368	$	87,270	$	79,195
Investment income, net of investment expenses	49,720		51,538		54,222
Net realized investment gains (losses)
Other-than-temporary impairment charges	—		—		(1,300		)
Net realized investment gains	4,008		1,156		3,022
Total net realized investment gains	4,008		1,156		1,722
Other income	617		621		508
Total revenues	$	115,713	$	140,585	$	135,647
Benefits, Losses and Expenses
Losses and loss settlement expenses	$	40,451	$	31,365	$	29,001
Increase in liability for future policy benefits	27,632		59,969		50,945
Amortization of deferred policy acquisition costs	5,181		8,121		6,634
Other underwriting expenses	13,281		19,881		19,306
Interest on policyholders’ accounts	18,525		20,079		23,680
Total benefits, losses and expenses	$	105,070	$	139,415	$	129,566
Income from discontinued operations before income taxes	$	10,643	$	1,170	$	6,081
Federal income tax expense	4,490		384		2,275
Net income from discontinued operations	$	6,153	$	786	$	3,806
Earnings per common share from discontinued operations:
Basic	$	0.24	$	0.03	$	0.15
Diluted	0.24		0.03		0.15

The Company's Consolidated Statement of Cash Flows presents operating, investing and financing cash flows of the discontinued operations separately. The Company's cash management and financial management of both continued and discontinued operations is consolidated as a centralized corporate function in our Finance Department.

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Schedule I. Summary of Investments - Other than Investments in Related Parties

12 Months Ended

Dec. 31, 2017

Summary of Investments, Other than Investments in Related Parties [Abstract]

Schedule I. Summary of Investments - Other than Investments in Related Parties

Schedule I. Summary of Investments — Other than Investments in Related Parties

Continuing Operations:

December 31, 2017	(In thousands)
	Cost or Amortized Cost				Amounts at Which Shown in Balance Sheet
Type of Investment			Fair Value
Fixed maturities
Bonds
United States Government and government agencies and authorities	$	94,941	$	95,353	$	95,353
States, municipalities and political subdivisions	1,019,420		1,034,827		1,034,827
Foreign governments	10,865		11,130		11,130
Public utilities	43,064		43,692		43,692
All other bonds	360,657		364,501		364,501
Redeemable preferred stock	2,395		2,559		2,559
Total fixed maturities	$	1,531,342	$	1,552,062	$	1,552,062
Equity securities
Common stocks
Public utilities	$	4,661	$	16,060	$	16,060
Banks, trusts and insurance companies	11,266		113,487		113,487
Industrial, miscellaneous and all other	44,077		153,959		153,959
Nonredeemable preferred stocks	3,271		3,838		3,838
Total equity securities	$	63,275	$	287,344	$	287,344
Other long-term investments	35,432		49,352		49,352
Short-term investments	175		175		175
Total investments	$	1,630,224	$	1,888,933	$	1,888,933

Discontinued Operations:

December 31, 2017	(In thousands)
	Cost or Amortized Cost				Amounts at Which Shown in Balance Sheet
Type of Investment			Fair Value
Fixed maturities
Bonds
United States Government and government agencies and authorities	$	43,706	$	43,706	$	43,706
States, municipalities and political subdivisions	37,963		38,363		38,363
Foreign governments	40,496		41,623		41,623
Public utilities	162,964		165,452		165,452
All other bonds	1,127,196		1,140,915		1,140,915
Total fixed maturities	$	1,412,325	$	1,430,059	$	1,430,059
Equity securities
Common stocks
Public utilities	$	2,544	$	7,253	$	7,253
Banks, trusts and insurance companies	467		3,158		3,158
Industrial, miscellaneous and all other	2,088		13,242		13,242
Total equity securities	$	5,099	$	23,653	$	23,653
Mortgage loans on real estate	$	3,435	$	3,594	$	3,435
Policy loans	5,815		5,815		5,815
Other long-term investments	14,077		16,437		16,437
Total investments	$	1,440,751	$	1,479,558	$	1,479,399

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Schedule II. Condensed Financial Statements of Parent Company

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule II. Condensed Financial Statements of Parent Company

Schedule II. Condensed Financial Statements of Parent Company

United Fire Group, Inc. (parent company only)

Condensed Balance Sheets

	December 31,
(In thousands, except share data)	2017		2016
Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $150 in 2017 and $150 in 2016)	$	150	$	150
Investment in subsidiary	967,590		925,887
Cash and cash equivalents	4,537		14,325
Federal income tax receivable	1,095		1,521
Accrued investment income	1		1
Total assets	$	973,373	$	941,884
Liabilities and stockholders' equity
Liabilities	$	—	$	—
Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 24,916,806 and 25,429,769 issued and outstanding in 2017 and 2016, respectively	$	25	$	25
Additional paid-in capital	196,334		216,482
Retained earnings	608,700		616,322
Accumulated other comprehensive income, net of tax	168,314		109,055
Total stockholders' equity	$	973,373	$	941,884
Total liabilities and stockholders' equity	$	973,373	$	941,884

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Annual Report on Form 10-K.

Schedule II. Condensed Financial Statements of Parent Company (continued)

United Fire Group, Inc. (parent company only)

Condensed Statements of Income and Comprehensive Income

	For the Years Ended December 31,
(In thousands)	2017			2016			2015
Revenues
Investment income	$	133		$	66		$	25
Total revenues	133			66			25
Expenses
Other operating expenses	$	103		$	73		$	116
Total expenses	103			73			116
Income (loss) before income taxes and equity in net income of subsidiary	30			(7		)	(91		)
Federal income tax benefit	(1,060		)	(3		)	(42		)
Net income (loss) before equity in net income of subsidiary	$	1,090		$	(4	)	$	(49	)
Equity in net income of subsidiary	49,933			49,908			89,175
Net income	$	51,023		$	49,904		$	89,126
Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary	$	72,251		$	13,017		$	(28,185	)
Change in liability for underfunded employee benefit plans of subsidiary	(26,122		)	30,045			8,714
Other comprehensive income (loss), before tax and reclassification adjustments	$	46,129		$	43,062		$	(19,471	)
Income tax effect	(17,540		)	(15,072		)	6,814
Other comprehensive income (loss), after tax, before reclassification adjustments	$	28,589		$	27,990		$	(12,657	)
Reclassification adjustment for net realized gains of the subsidiary included in income	(6,390		)	(4,520		)	(4,513		)
Reclassification adjustment for employee benefit costs of the subsidiary included in expense	5,408			5,486			7,468
Total reclassification adjustments, before tax	$	(982	)	$	966		$	2,955
Income tax effect	344			(338		)	(1,034		)
Total reclassification adjustments, after tax	$	(638	)	$	628		$	1,921
Comprehensive income	$	78,974		$	78,522		$	78,390

United Fire Group, Inc. and its subsidiaries file a consolidated federal income tax return. The federal income tax provision represents an allocation under its tax allocation agreements.

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Annual Report on Form 10-K.

Schedule II. Condensed Financial Statements of Parent Company (continued)

United Fire Group, Inc. (parent company only)

Condensed Statements of Cash Flows

	For the Years Ended December 31,
(In thousands)	2017			2016			2015
Cash flows from operating activities
Net income	$	51,023		$	49,904		$	89,126
Adjustments to reconcile net income to net cash provided by operating activities
Equity in net income of subsidiary	(49,933		)	(49,908		)	(89,175		)
Dividends received from subsidiary	40,000			24,000			22,500
Other, net	1,415			2,995			1,269
Total adjustments	$	(8,518	)	$	(22,913	)	$	(65,406	)
Net cash provided by operating activities	$	42,505		$	26,991		$	23,720
Cash flows from investing activities
Proceeds from maturity of held-to-maturity investments	$	150		$	—		$	—
Purchase of held-to-maturity investments	(150		)	—			—
Net cash used in investing activities	$	—		$	—		$	—
Cash flows from financing activities
Payment of cash dividends	$	(27,337	)	$	(24,591	)	$	(21,658	)
Repurchase of common stock	(29,784		)	(3,746		)	(2,423		)
Issuance of common stock	4,828			9,922			5,496
Tax impact from issuance of common stock	—			(816		)	(833		)
Net cash used in financing activities	$	(52,293	)	$	(19,231	)	$	(19,418	)
Net change in cash and cash equivalents	$	(9,788	)	$	7,760		$	4,302
Cash and cash equivalents at beginning of period	14,325			6,565			2,263
Cash and cash equivalents at end of year	$	4,537		$	14,325		$	6,565

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Form 10-K.

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Schedule III. Supplementary Insurance Information

12 Months Ended

Dec. 31, 2017

Supplementary Insurance Information [Abstract]

Schedule III. Supplementary Insurance Information

Schedule III. Supplementary Insurance Information

(In thousands)	Deferred Policy Acquisition Costs		Future Policy Benefits, Losses, Claims and Loss Expenses		Unearned Premiums		Earned Premium Revenue		Investment Income, Net		Benefits, Claims, Losses and Settlement Expenses		Amortization of Deferred Policy Acquisition Costs		Other Underwriting Expenses		Interest on Policyholders' Accounts		Premiums Written (2)
Year Ended December 31, 2017
Continuing Operations	$	88,102	$	1,224,183	$	465,391	$	997,492	$	51,190	$	725,713	$	207,746	$	103,628	$	—	$	1,019,113
Discontinued Operations(1)	71,151		1,320,401		67		61,368		49,720		68,083		5,181		13,281		18,525		—
Total	$	159,253	$	2,544,584	$	465,458	$	1,058,860	$	100,910	$	793,796	$	212,927	$	116,909	$	18,525	$	1,019,113
Year Ended December 31, 2016
Continuing Operations	$	93,362	$	1,123,896	$	443,802	$	936,131	$	55,284	$	652,433	$	202,892	$	83,540	$	—	$	964,970
Discontinued Operations(1)	70,750		1,350,503		71		87,270		51,538		91,334		8,121		19,881		20,079		—
Total	$	164,112	$	2,474,399	$	443,873	$	1,023,401	$	106,822	$	743,767	$	211,013	$	103,421	$	20,079	$	964,970
Year Ended December 31, 2015
Continuing Operations	$	90,547	$	1,003,895	$	414,971	$	851,695	$	46,559	$	520,087	$	180,183	$	83,631	$	—	$	887,874
Discontinued Operations(1)	77,717		1,372,358		86		79,195		54,222		79,946		6,634		19,306		23,680		—
Total	$	168,264	$	2,376,253	$	415,057	$	930,890	$	100,781	$	600,033	$	186,817	$	102,937	$	23,680	$	887,874

(1) Annuity deposits are included in future policy benefits, losses, claims and loss expenses.

(2) Pursuant to Regulation S-X, premiums written does not apply to life insurance companies.

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Schedule IV. Reinsurance

12 Months Ended

Dec. 31, 2017

Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract]

Schedule IV. Reinsurance

Schedule IV. Reinsurance

(In thousands)	Gross Amount		Ceded to Other Companies		Assumed From Other Companies		Net Amount		Percentage of Amount Assumed to Net Earned
Year Ended December 31, 2017
Life insurance in force	$	5,309,508	$	1,014,794	$	—	$	4,294,714
Premiums earned
Continuing Operations - Property and casualty insurance	$	1,043,738	$	61,305	$	15,059	$	997,492	1.51	%
Discontinued Operations - Life, accident and health insurance	64,090		2,722		—		61,368		—	%
Total	$	1,107,828	$	64,027	$	15,059	$	1,058,860	1.42	%
Year Ended December 31, 2016
Life insurance in force	$	5,314,548	$	1,023,197	$	—	$	4,291,351
Premiums earned
Continuing Operations - Property and casualty insurance	$	977,090	$	57,996	$	17,037	$	936,131	1.82	%
Discontinued Operations - Life, accident and health insurance	90,038		2,768		—		87,270		—	%
Total	$	1,067,128	$	60,764	$	17,037	$	1,023,401	1.66	%
Year Ended December 31, 2015
Life insurance in force	$	5,491,932	$	1,165,868	$	—	$	4,326,064
Premiums earned
Continuing Operations - Property and casualty insurance	$	890,057	$	56,758	$	18,396	$	851,695	2.16	%
Discontinued Operations - Life, accident and health insurance	82,356		3,161		—		79,195		—	%
Total	$	972,413	$	59,919	$	18,396	$	930,890	1.98	%

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Schedule V. Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2017

Valuation and Qualifying Accounts [Abstract]

Schedule V. Valuation and Qualifying Accounts

Schedule V. Valuation And Qualifying Accounts

(In thousands)	Balance at beginning of period		Charged to costs and expenses		Deductions		Balance at end of period
Description
Allowance for bad debts
Year Ended December 31, 2017	$	1,255	$	—	$	—	$	1,255
Year Ended December 31, 2016	867		388		—		1,255
Year Ended December 31, 2015	618		249		—		867
Deferred tax asset valuation allowance (1)
Year Ended December 31, 2017	$	718	$	—	$	389	$	329
Year Ended December 31, 2016	1,265		—		547		718
Year Ended December 31, 2015	1,813		—		548		1,265

(1) Recorded in connection with the purchase of American Indemnity Financial Corporation in 1999.

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Schedule VI. Supplemental Information Concerning Property and Casualty Insurance Operations

12 Months Ended

Dec. 31, 2017

Supplemental Information for Property, Casualty Insurance Underwriters [Abstract]

Schedule VI. Supplemental Information Concerning Property and Casualty Insurance Operations

Schedule VI. Supplemental Information Concerning Property and Casualty Insurance Operations

(In thousands)
Affiliation with Registrant: United Fire & Casualty Company and consolidated property and casualty subsidiaries													Claims and Claim Adjustment Expenses Incurred Related to:						Amortization of Deferred Policy Acquisition Costs (1)
			Reserves for Unpaid Claims and Claim Adjustment Expenses						Net Realized Investment Gains
	Deferred Policy Acquisition Costs										Net Investment Income										Paid Claims and Claim Adjustment Expenses
					Unearned Premiums		Earned Premiums						Current Year			Prior Years							Premiums Written
2017	$	88,102	$	1,224,183	$	465,391	$	997,492	$	4,055	$	51,190	$	(779,966	)	$	(54,253	)	$	207,746	$	625,503	$	1,019,113
2016	$	93,362	$	1,123,896	$	443,802	$	936,131	$	4,947	$	55,284	$	683,662		$	(31,229	)	$	202,892	$	537,573	$	964,970
2015	$	90,547	$	1,003,895	$	414,971	$	851,695	$	1,124	$	46,559	$	560,482		$	(40,395	)	$	180,183	$	476,525	$	887,874

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Discontinued Operations

Discontinued Operations

We have historically reported our operations in two business segments: property and casualty insurance and life insurance. On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company ("United Life"), to Kuvare US Holdings, Inc. ("Kuvare"). As a result, our life insurance business, previously a separate segment, has been considered held for sale and reported as discontinued operations in the Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income and Consolidated Statements of Cash Flows (collectively, the "Consolidated Financial Statements"). Subsequent to the announcement of this sale, our continuing operations are now reported as one business segment. All current and prior periods reflected in this Form 10-K have been presented as continuing and discontinued operations, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval. For more information, refer to Note 17 "Discontinued Operations."

Principles of Consolidation

Principles of Consolidation

The accompanying Consolidated Financial Statements include United Fire and its wholly owned subsidiaries: United Fire & Casualty Company, United Real Estate Holdings Company, LLC, United Life, Addison Insurance Company, Lafayette Insurance Company, United Fire & Indemnity Company, United Fire Lloyds, UFG Specialty Insurance Company, Financial Pacific Insurance Company, Franklin Insurance Company, Mercer Insurance Company, and Mercer Insurance Company of New Jersey, Inc.

United Fire Lloyds, an affiliate of United Fire & Indemnity Company, is organized as a Texas Lloyds plan, which is an aggregation of underwriters who, under a common name, engage in the business of insurance through a corporate attorney-in-fact. United Fire Lloyds is financially and operationally controlled by United Fire & Indemnity Company, its corporate attorney-in-fact, pursuant to three types of agreements: trust agreements between United Fire & Indemnity Company and certain individuals who agree to serve as trustees; articles of agreement among the trustees who agree to act as underwriters to establish how the Lloyds plan will be operated; and powers of attorney from each of the underwriters appointing a corporate attorney-in-fact, who is authorized to operate the Lloyds plan. Because United Fire & Indemnity Company can name the trustees, the Lloyds plan is perpetual, subject only to United Fire & Indemnity Company's desire to terminate it.

United Fire & Indemnity Company provides all of the statutory capital necessary for the formation of the Lloyds plan by contributing capital to each of the trustees. The trust agreements require the trustees to become underwriters of the Lloyds plan, to contribute the capital to the Lloyds plan, to sign the articles of agreement and to appoint the attorney-in-fact. The trust agreements also require the trustees to pay to United Fire & Indemnity Company all of the profits and benefits received by the trustees as underwriters of the Lloyds plan, which means that United Fire & Indemnity Company has the right to receive 100 percent of the gains and profits from the Lloyds plan. The trustees serve at the pleasure of United Fire & Indemnity Company, which may remove a trustee and replace that trustee at any time. Termination of a trustee must be accompanied by the resignation of the trustee as an underwriter, so that the trustee can obtain the capital contribution from the Lloyds plan to reimburse United Fire & Indemnity Company. By retaining the ability to terminate trustees, United Fire & Indemnity Company possesses the ability to name and remove the underwriters.

United Real Estate Holdings, LLC, formed in 2013, is a wholly owned subsidiary of United Fire & Casualty Company and is organized as an Iowa limited liability corporation, an unincorporated association formed for the purpose of holding United Fire & Casualty Company's ownership in commercial real estate.

In 2015, the Company dissolved three of its holding companies in order to flatten our organizational chart. The companies dissolved were American Indemnity Financial Corporation, Mercer Insurance Group, Inc. and Financial Pacific Insurance Group, Inc. In addition, Texas General Indemnity Company was renamed UFG Specialty Insurance Company on July 1, 2015.

Basis of Presentation

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP"), which differ in some respects from those followed in preparing our statutory reports to insurance regulatory authorities. Our stand-alone subsidiary financial statements submitted to insurance regulatory authorities are presented on the basis of accounting practices prescribed or permitted by the insurance departments of the states in which we are domiciled ("statutory accounting principles").

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; future policy benefits and losses, claims and loss settlement expenses; and pension and post-retirement benefit obligations.

Property and Casualty and Life Insurance Business

Discontinued Operations - Life Insurance Business

Our whole life and term insurance (i.e., traditional business) premiums are reported as earned when due and benefits and expenses are associated with premium income in order to result in the recognition of profits over the lives of the related contracts.

Continuing Operations - Property and Casualty Insurance Business

Premiums written are deferred and recorded as earned premium on a daily pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policies in force.

Loss and Loss Settlement Expense Reserves

To establish loss and loss settlement expense reserves, we make estimates and assumptions about the future development of claims. Actual results could differ materially from those estimates, which are subjective, complex and inherently uncertain. When we establish and adjust reserves, we do so given our knowledge at the time of the circumstances and facts of known claims. To the extent that we have overestimated or underestimated our loss and loss settlement expense reserves, we adjust the reserves in the period in which such adjustment is determined.

Premiums Receivable

Premiums receivable are presented net of an estimated allowance for doubtful accounts, which is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders.

Premiums receivable are presented net of an estimated allowance for doubtful accounts.

Universal Life and Annuity Policies

On universal life and deferred annuity policies (i.e., non-traditional business), income and expenses are reported when charged and credited to policyholder account balances in order to result in recognition of profits over the lives of the related contracts. We accomplish this by means of a provision for future policy benefits and the deferral and subsequent amortization of policy acquisition costs.

Future Policy Benefits Liability

Liabilities for future policy benefits for traditional products are computed by the net level premium method, using interest assumptions ranging from 3.15 percent to 6.0 percent and withdrawal, mortality and morbidity assumptions appropriate at the time the policies were issued. Liabilities for non-traditional business are stated at policyholder account values before surrender charges. Liabilities for traditional immediate annuities are based primarily upon future anticipated cash flows using assumptions for mortality and interest rates. Liabilities for deferred annuities are carried at the account value.

Reinsurance

Reinsurance

Premiums earned and losses and loss settlement expenses incurred are reported net of reinsurance ceded. Ceded insurance business is accounted for on a basis consistent with the original policies issued and the terms of the reinsurance contracts.

Investments

Investments

Investments in fixed maturities include bonds and redeemable preferred stocks. Our investments in held-to-maturity fixed maturities are recorded at amortized cost. Our investments in available-for-sale fixed maturities and trading securities are recorded at fair value.

Investments in equity securities, which include common and non-redeemable preferred stocks, are classified as available-for-sale or trading and are recorded at fair value.

Changes in unrealized appreciation and depreciation, with respect to available-for-sale fixed maturities and equity securities, are reported as a component of accumulated other comprehensive income, net of applicable deferred income taxes, in stockholders' equity. Changes in unrealized appreciation and depreciation, with respect to trading securities, are reported as a component of income.

Other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting.

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and non-negotiable certificates of deposit with original maturities of three months or less.

Deferred Policy Acquisition Costs

Deferred Policy Acquisition Costs ("DAC")

Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred.

Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned. This estimate is performed by line of business in a manner consistent with how the policies are currently being marketed and managed.

For traditional life insurance policies, DAC is amortized to income over the premium-paying period in proportion to the ratio of the expected annual premium revenue to the expected total premium revenue. Expected premium revenue and gross profits are based on the same mortality and withdrawal assumptions used in determining future policy benefits. These assumptions are not revised after policy issuance unless the recorded DAC asset is deemed to be unrecoverable from future expected profits.

For non-traditional life insurance policies, DAC is amortized over the anticipated terms in proportion to the ratio of the expected annual gross profits to the total expected gross profits. Changes in the amount or timing of expected gross profits result in adjustments to the cumulative amortization of these costs. The effect on amortization of DAC for revisions to estimated gross profits is reported in earnings in the period the estimated gross profits are revised.

The effect on DAC that results from the assumed realization of unrealized gains (losses) on investments allocated to non-traditional life insurance business is recognized with an offset to net unrealized investment appreciation as of the balance sheet date.

Property, Equipment and Depreciation

Property, Equipment and Depreciation

Property and equipment is presented at cost less accumulated depreciation.

Expenditures for maintenance and repairs on property and equipment are generally expensed as incurred. We periodically review these assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the underlying asset may not be recoverable. A loss would be recognized if the estimated fair value of the asset were less than its carrying value.

Depreciation is computed primarily by the straight-line method over the following estimated useful lives:

	Useful Life
Computer equipment and software	Three years
Furniture and fixtures	Seven years
Leasehold improvements	Shorter of the lease term or useful life of the asset
Real estate	Seven to thirty-nine years
Airplane	Five years

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill and other intangible assets arise as a result of business combinations and consist of the excess of the fair value of consideration paid over the tangible assets acquired and liabilities assumed. All of our goodwill and the majority of our intangible assets relate to the acquisition of Mercer Insurance Group on March 28, 2011. We evaluate goodwill and other intangible assets for impairment at least on an annual basis or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount of goodwill and other intangible assets may exceed its implied fair value. Goodwill is evaluated at the reporting unit level. Any impairment is charged to operations in the period that the impairment is identified. In 2016 and 2015, we performed a quantitative impairment assessment of our goodwill and in 2017, we performed a qualitative impairment assessment of our goodwill. As a result of these assessments, we did not recognize an impairment charge on our goodwill in 2017, 2016 or 2015.

Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized by the straight-line method over periods ranging from 2 years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense.

The Company performs a quarterly review of its tax positions and makes a determination whether it is more likely than not that the tax position will be sustained upon examination. If based on this review, it appears not more likely than not that the position will be sustained, the Company will calculate any unrecognized tax benefits and calculate any interest and penalties. At December 31, 2017, 2016, and 2015 the Company did not recognize any liability for unrecognized tax benefits. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense.

We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2014.

Stock-Based Compensation

Stock-Based Compensation

We currently have two equity compensation plans. One plan allows us to grant restricted and unrestricted stock, stock appreciation rights, incentive stock options, and non-qualified stock options to employees. The other plan allows us to grant restricted and non-qualified stock options to non-employee directors.

We utilize the Black-Scholes option pricing method to establish the fair value of non-qualified stock options granted under our equity compensation plans. Our determination of the fair value of stock options on the date of grant using this option-pricing model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, which include the expected volatility in our stock price, the expected term of the award, the expected dividends to be paid over the term of the award and the expected risk-free interest rate. Any changes in these assumptions may materially affect the estimated fair value of the award. For our restricted and unrestricted stock awards, we utilize the fair value of our common stock on the date of grant to establish the fair value of the award.

Comprehensive Income

Comprehensive Income

Comprehensive income includes all changes in stockholders' equity during a period except those resulting from investments by and dividends to stockholders.

Subsequent Events

Subsequent Events

In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements.

Recently Issued Accounting Standards and Pending Adoption of Accounting Standards

Recently Issued Accounting Standards

Accounting Standards Adopted in 2017

Share-Based Payments

In March 2016, the Financial Accounting Standards Board ("FASB") issued new guidance on the accounting for share-based payments. The new guidance was issued to simplify the accounting of share-based payments, specifically in the areas of income taxes, classification on the balance sheets as liabilities or equity and classification in the cash flow statement. The new guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those years. The Company adopted the new guidance prospectively as of January 1, 2017. The new guidance resulted in classification changes between the financing and operating section of the Statement of Cash Flow for stock based compensation expense. The adoption also resulted in a tax benefit of $149 and $695 during the three- and twelve-months ended December 31, 2017.

Income Taxes

In December 2015, the FASB issued guidance on the balance sheet classification of deferred taxes. The new guidance eliminates the requirement to split deferred tax liabilities and assets between current and non-current in a classified balance sheet. The new guidance allows deferred tax liabilities and assets to be included in non-current accounts.The Company adopted the new guidance as of January 1, 2017. The adoption had no impact on the Company's financial position and results of operations since we do not currently report deferred taxes in classified balance sheets.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB finalized the proposed accounting guidance which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the new federal corporate income tax rate. The pronouncement permits the reclassification of other stranded tax effects that relate to the Tax Cuts and Jobs Act (the "Tax Act") but do not directly relate to the change in the federal rate. The guidance is effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption is permitted for reporting periods for which financial statements have not yet been issued or made available for issuance. The Company has early adopted this guidance for the December 31, 2017 Consolidated Financial Statements. The reclassification from Accumulated Other Comprehensive Income to Retained Earnings for the stranded tax effects resulting from the new federal corporate income tax rate was $31.3 million at December 31, 2017.

Pending Adoption of Accounting Standards

Revenue Recognition

In May 2014, the FASB issued comprehensive new guidance on revenue recognition which supersedes nearly all existing revenue recognition guidance under GAAP. The new guidance requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) and all relevant facts and circumstances. Insurance contracts are not within the scope of this new guidance. The new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted the guidance as of January 1, 2018. The Company has completed its review of revenue streams under this new guidance and concluded that the adoption of the new guidance will have no impact on the Company's reporting and disclosure of net premiums earned from insurance contracts, net investment income or net realized gains and losses, as these revenue streams are not within the scope of this new guidance. The remaining revenue streams are immaterial and not impacted by the new standard.

Financial Instruments

In January 2016, the FASB issued guidance updating certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (for example, trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The new guidance also simplifies the impairment process for equity investments without readily determinable fair values. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018. If the new guidance had been adopted as of December 31, 2017, there would be a reclassification from accumulated other comprehensive income to retained earnings of $242.1 million, which is equal to the amount of net unrealized gains and losses on available-for-sale equity securities at December 31, 2017 disclosed in Note 2 "Summary of Investments," of this section. The impact to net realized gains (losses) would equal the change in net unrealized gains and losses on available-for-sale equity securities between December 31, 2017 and December 31, 2016, in the same tables.

Statement of Cash Flows - Classification of Certain Cash Receipts and Payments

In August 2016, the FASB issued an update that clarifies the classification of certain cash receipts and payments in the Statement of Cash Flows. The update addresses eight existing cash flow issues by clarifying the correct classification to establish uniformity in practice. The updated guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018. The adoption will have no impact on the Company's financial position and results of operations.

Defined Benefit Retirement Plan Cost

In March 2017, the FASB issued guidance on the presentation of net periodic benefit costs of defined benefit retirement benefit plans in the Statements of Income. The new guidance requires the service cost component of net periodic benefit cost of defined benefit plans to be presented in the same line in the Statements of Income as other employee compensation expenses. Also, under the new guidance, the service cost component of the net periodic benefit costs will be the only portion of costs subject to be capitalized in assets. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company has adopted the new guidance as of January 1, 2018 and will update the presentation of net periodic benefit costs in its financial statements beginning with its first quarter Form 10-Q as of March 31, 2018. The adoption will have an immaterial impact on the Company's financial position and results of operations.

Share-Based Payments

In May 2017, the FASB issued new guidance which clarifies and addresses the diversity in practice when there is a change in the terms of a share-based payment award. The updated guidance clarifies when to use modification accounting when there is a change in the terms of a share-based payment and provides three conditions where modification accounting should not be applied. The new guidance is effective for annual and interim periods beginning after December 15, 2017. The Company has adopted the new guidance as of January 1, 2018. The adoption will have no impact on the Company's financial position and results of operations.

Leases

In February 2016, the FASB issued guidance on the accounting for leases. The new guidance requires lessees to place a right-of-use asset and a lease liability, for all leases with terms greater than 12 months, on their balance sheets. The lease liability will be based on the present value of the future lease payments and the asset will be based on the liability. Expenses will be recognized on the income statement in a similar manner as previous methods. The new guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those years. The Company will adopt the new guidance as of January 1, 2019. The Company has created an inventory of its operating leases and has calculated the undiscounted future minimum lease payments, which are disclosed in Note 13. Lease Commitments. The undiscounted future minimum lease payments at December 31, 2017 is $22.5 million, which represents less than 1.0 percent of the Company's total assets at December 31, 2017. The Company is reviewing and working on updating it's processes and controls under the new guidance. Management currently believes that the adoption will not have a significant impact on the Company's financial position and results of operations.

Financial Instruments - Credit Losses

In June 2016, the FASB issued new guidance on the measurement of credit losses for most financial instruments. The new guidance replaces the current incurred loss model for recognizing credit losses with an expected loss model for instruments measured at amortized cost and requires allowances to be recorded for available-for-sale debt securities rather than reduce the carrying amount. These allowances will be remeasured each reporting period. The new guidance is effective for annual periods beginning after December 15, 2020 and interim periods within those years. The Company will adopt the new guidance as of January 1, 2021 and is currently evaluating the impact on the Company's financial position, results of operations and key processes.

Income Taxes - Intra-entity Transfers

In October 2016, the FASB issued new guidance on the income tax treatment of intra-entity transfers. The new guidance replaces the current guidance which prohibits the recognition of current and deferred income taxes of intra-entity transfers until the asset is sold externally. Under the new guidance, the exemption is eliminated and income taxes will be recognized on transfers of intra-entity assets. The new guidance is effective for annual periods beginning after December 15, 2018 and interim periods beginning after December 15, 2019. The Company will adopt the new guidance as of January 1, 2019 and is currently evaluating the impact on the Company's financial position and results of operations.

Goodwill

In January 2017, the FASB issued new guidance which simplifies the test for goodwill impairment. The new guidance eliminates the implied fair value calculation when measuring a goodwill impairment charge. Under the new guidance, impairment charges will be based on the excess of the carrying value over fair value of goodwill. The new guidance is effective for annual and interim periods beginning after December 15, 2019. The Company will adopt the new guidance as of January 1, 2020 and it currently believes the adoption will have no impact on the Company's financial position and results of operations.

Fair Value Measurement

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

• Level 1: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

• Level 2: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

• Level 3: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period.

To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. We obtain one price for each security. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years experience and who have demonstrated knowledge of the subject security. We request and utilize one broker quote per security.

In order to determine the proper classification in the fair value hierarchy for each security where the price is obtained from an independent pricing service, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements.

When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section.

The fair value of our mortgage loans is determined by modeling performed by us based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the loan's fair value, which is a Level 3 fair value measurement.

The fair value of our policy loans is equivalent to carrying value, which is a reasonable estimate of fair value and is classified as Level 2. We do not make policy loans for amounts in excess of the cash surrender value of the related policy. In all instances, the policy loans are fully collateralized by the related liability for future policy benefits for traditional insurance policies or by the policyholders' account balance for non-traditional policies.

Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers.

For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments.

The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Non-qualified Deferred Compensation Plan and United Fire Group Supplemental Executive Retirement and Deferral Plan (collectively the "Executive Retirement Plans"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plans. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of December 31, 2017, the cash surrender value of the COLI policies was $4,029, which is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policies, and is included in other assets in the Consolidated Balance Sheets.

Policy reserves are developed and recorded for deferred annuities, which is an interest-sensitive product, and income annuities. The fair value of the reserve liability for these annuity products is based upon an estimate of the discounted pretax cash flows that are forecast for the underlying business, which is a Level 3 fair value measurement. We base the discount rate on the current U.S. Treasury spot yield curve, which is then risk-adjusted for nonperformance risk and, for interest-sensitive business and market risk factors. The risk-adjusted discount rate is developed using interest rates that are available in the market and representative of the risks applicable to the underlying business.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options and restricted stock awards.

We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of Deferred Acquisition Costs

The following table is a summary of the components of DAC that are reported in the accompanying Consolidated Financial Statements.

Continuing Operations - Property and Casualty Insurance	2017			2016			2015
Recorded asset at beginning of year	$	93,362		$	90,547		$	72,861
Underwriting costs deferred	202,486			205,707			197,869
Amortization of deferred policy acquisition costs	(207,746		)	(202,892		)	(180,183		)
Recorded asset at end of year	$	88,102		$	93,362		$	90,547
Discontinued Operations - Life Insurance
Recorded asset at beginning of year	$	70,750		$	77,717		$	66,858
Underwriting costs deferred	5,463			5,564			6,113
Amortization of deferred policy acquisition costs	(5,181		)	(8,121		)	(6,634		)
	$	71,032		$	75,160		$	66,337
Change in "shadow" deferred policy acquisition costs	119			(4,410		)	11,380
Recorded asset at end of year	$	71,151		$	70,750		$	77,717
Total
Recorded asset at beginning of year	$	164,112		$	168,264		$	139,719
Underwriting costs deferred	207,949			211,271			203,982
Amortization of deferred policy acquisition costs	(212,927		)	(211,013		)	(186,817		)
	$	159,134		$	168,522		$	156,884
Change in "shadow" deferred policy acquisition costs	119			(4,410		)	11,380
Recorded asset at end of year	$	159,253		$	164,112		$	168,264

Schedule of Property and Equipment

The following table is a summary of the components of the property and equipment that are reported in the accompanying Consolidated Financial Statements.

	2017		2016
Real estate:
Land	$	8,396	$	8,231
Buildings	48,677		41,119
Furniture and fixtures	4,645		4,711
Computer equipment and software	7,274		1,463
Airplane	—		—
Total property and equipment	$	68,992	$	55,524

Depreciation is computed primarily by the straight-line method over the following estimated useful lives:

	Useful Life
Computer equipment and software	Three years
Furniture and fixtures	Seven years
Leasehold improvements	Shorter of the lease term or useful life of the asset
Real estate	Seven to thirty-nine years
Airplane	Five years

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SUMMARY OF INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Amortized Cost to Fair Value

The table that follows is a reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and available-for-sale equity securities, presented on a consolidated basis, including both continuing and discontinued operations as of December 31, 2017 and 2016.

December 31, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	34		—		—		34
Total Held-to-Maturity Fixed Maturities	$	184	$	—	$	—	$	184
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	17,073	$	4	$	186	$	16,891
U.S. government agency	121,574		1,311		717		122,168
States, municipalities and political subdivisions
General obligations:
Midwest	107,689		2,446		439		109,696
Northeast	47,477		1,174		10		48,641
South	139,870		2,462		813		141,519
West	111,123		2,351		463		113,011
Special revenue:
Midwest	155,475		3,620		351		158,744
Northeast	79,028		1,351		619		79,760
South	260,145		5,218		1,851		263,512
West	156,576		2,929		1,198		158,307
Foreign bonds	51,361		1,441		49		52,753
Public utilities	206,028		3,386		270		209,144
Corporate bonds
Energy	93,191		1,972		110		95,053
Industrials	218,067		3,881		241		221,707
Consumer goods and services	183,253		3,498		494		186,257
Health care	74,125		1,312		29		75,408
Technology, media and telecommunications	146,853		2,376		250		148,979
Financial services	277,824		5,769		442		283,151
Mortgage-backed securities	13,828		101		238		13,691
Collateralized mortgage obligations
Government national mortgage association	157,836		1,921		2,274		157,483
Federal home loan mortgage corporation	201,320		1,879		4,047		199,152
Federal national mortgage association	104,903		1,703		1,174		105,432
Asset-backed securities	4,282		362		8		4,636
Total Available-For-Sale Fixed Maturities	$	2,928,901	$	52,467	$	16,273	$	2,965,095
Equity securities
Common stocks
Public utilities	$	6,394	$	16,075	$	30	$	22,439
Energy	6,514		8,171		120		14,565
Industrials	13,117		53,522		120		66,519
Consumer goods and services	10,110		15,742		164		25,688
Health care	7,763		32,340		—		40,103
Technology, media and telecommunications	6,067		11,556		115		17,508
Financial services	11,529		104,985		67		116,447
Nonredeemable preferred stocks	992		305		—		1,297
Total Available-for-Sale Equity Securities	$	62,486	$	242,696	$	616	$	304,566
Total Available-for-Sale Securities	$	2,991,387	$	295,163	$	16,889	$	3,269,661

December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds - financial services	$	150	$	—	$	—	$	150
Mortgage-backed securities	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	23,216	$	87	$	108	$	23,195
U.S. government agency	76,692		1,445		540		77,597
States, municipalities and political subdivisions
General obligations:
Midwest	143,747		1,808		1,412		144,143
Northeast	57,731		909		231		58,409
South	129,475		1,249		2,355		128,369
West	114,524		1,380		2,173		113,731
Special revenue:
Midwest	167,430		2,313		1,433		168,310
Northeast	70,202		487		2,624		68,065
South	244,225		1,753		6,791		239,187
West	134,287		1,509		4,052		131,744
Foreign bonds	62,995		2,239		—		65,234
Public utilities	212,360		3,761		447		215,674
Corporate bonds
Energy	107,084		2,195		419		108,860
Industrials	225,526		5,359		982		229,903
Consumer goods and services	178,135		3,847		295		181,687
Health care	81,211		2,063		151		83,123
Technology, media and telecommunications	143,402		2,029		819		144,612
Financial services	269,981		5,328		1,358		273,951
Mortgage-backed securities	17,288		201		241		17,248
Collateralized mortgage obligations
Government national mortgage association	145,947		1,279		2,766		144,460
Federal home loan mortgage corporation	176,226		1,638		3,406		174,458
Federal national mortgage association	101,414		1,816		1,334		101,896
Asset-backed securities	4,407		145		282		4,270
Total Available-For-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities
Common stocks
Public utilities	$	6,394	$	13,465	$	188	$	19,671
Energy	6,514		8,555		22		15,047
Industrials	13,252		38,715		173		51,794
Consumer goods and services	10,324		13,851		58		24,117
Health care	7,763		19,657		—		27,420
Technology, media and telecommunications	5,931		9,476		38		15,369
Financial services	17,289		98,728		67		115,950
Nonredeemable preferred stocks	1,037		11		—		1,048
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

The following table is a reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and equity securities for continuing and discontinued operations by investment type at December 31, 2017 and 2016.

December 31, 2017
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Continuing operations	$	150	$	—	$	—	$	150
Discontinued operations	34		—		—		34
Total Held-to-Maturity Fixed Maturities	$	184	$	—	$	—	184
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,516,610	$	27,412	$	8,952	$	1,535,070
Discontinued operations	1,412,291		25,055		7,321		1,430,025
Total Available-for-Sale Fixed Maturities	$	2,928,901	$	52,467	$	16,273	$	2,965,095
Equity securities:
Continuing operations	$	57,387	$	224,065	$	539	$	280,913
Discontinued operations	5,099		18,631		77		23,653
Total Available-for-Sale Equity Securities	$	62,486	$	242,696	$	616	$	304,566
Total Available-for-Sale Securities	$	2,991,387	$	295,163	$	16,889	$	3,269,661

December 31, 2016
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Continuing operations	$	150	$	—	$	—	$	150
Discontinued operations	48		1		—		49
Total Held-to-Maturity Fixed Maturities	$	198	$	1	$	—	$	199
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,458,235	$	18,725	$	23,674	$	1,453,286
Discontinued operations	1,429,270		26,115		10,545		1,444,840
Total Available-for-Sale Fixed Maturities	$	2,887,505	$	44,840	$	34,219	$	2,898,126
Equity securities:
Continuing operations	$	59,994	$	186,692	$	316	$	246,370
Discontinued operations	8,510		15,766		230		24,046
Total Available-for-Sale Equity Securities	$	68,504	$	202,458	$	546	$	270,416
Total Available-for-Sale Securities	$	2,956,009	$	247,298	$	34,765	$	3,168,542

Contractual Maturity of Investments

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at December 31, 2017, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

Maturities - Consolidated:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	97,450	$	97,994	$	2,225	$	2,835
Due after one year through five years	150		150		749,372		763,260		9,055		10,547
Due after five years through 10 years	—		—		823,257		839,360		1,302		1,156
Due after 10 years	—		—		776,653		784,087		2,000		2,304
Asset-backed securities	—		—		4,282		4,636		—		—
Mortgage-backed securities	34		34		13,828		13,691		—		—
Collateralized mortgage obligations	—		—		464,059		462,067		—		—
	$	184	$	184	$	2,928,901	$	2,965,095	$	14,582	$	16,842

Maturities - Continuing Operations:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	37,899	$	38,144	$	2,225	$	2,835
Due after one year through five years	150		150		204,494		208,353		9,055		10,547
Due after five years through 10 years	—		—		394,107		402,799		1,302		1,156
Due after 10 years	—		—		694,850		700,879		2,000		2,304
Asset-backed securities	—		—		3,175		3,535		—		—
Mortgage-backed securities	—		—		9,205		9,231		—		—
Collateralized mortgage obligations	—		—		172,880		172,129		—		—
	$	150	$	150	$	1,516,610	$	1,535,070	$	14,582	$	16,842

Maturities - Discontinued Operations:
	Held-To-Maturity				Available-For-Sale				Trading
December 31, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	59,551	$	59,850	$	—	$	—
Due after one year through five years	—		—		544,878		554,907		—		—
Due after five years through 10 years	—		—		429,150		436,561		—		—
Due after 10 years	—		—		81,803		83,208		—		—
Asset-backed securities	—		—		1,107		1,101		—		—
Mortgage-backed securities	34		34		4,623		4,460		—		—
Collateralized mortgage obligations	—		—		291,179		289,938		—		—
	$	34	$	34	$	1,412,291	$	1,430,025	$	—	$	—

Summary of Net Realized Investment Gains (Losses)

A summary of net realized investment gains (losses) for 2017, 2016 and 2015, is as follows:

	2017		2016			2015
Net realized investment gains (losses) from continuing operations
Fixed maturities:
Available-for-sale	$	829	$	1,004		$	814
Trading securities
Change in fair value	924		189			(1,352		)
Sales	244		931			1,381
Equity securities:
Available-for-sale	1,553		2,359			1,977
Trading securities
Change in fair value	332		301			(448		)
Sales	57		(6		)	66
Other long-term investments	—		—			(1,314		)
Other-than-temporary-impairment charges:
Fixed maturities	—		—			—
Cash equivalents	—		169			—
Real Estate	116		—			—
Total net realized investment gains from continuing operations	$	4,055	$	4,947		$	1,124
Total net realized investment gains from discontinued operations	4,008		1,156			1,722
Total net realized investment gains	$	8,063	$	6,103		$	2,846

Schedule of Proceeds and Gross Realized Gains (Losses)

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities from continuing operations for 2017, 2016 and 2015, are as follows:

	2017			2016		2015
Proceeds from sales	$	7,404		$	1,968	$	478
Gross realized gains	1,046			920		451
Gross realized losses	(20		)	—		—

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities from discontinued operations for 2017, 2016 and 2015, are as follows:

	2017			2016			2015
Proceeds from sales	$	7,315		$	12,354		$	11,066
Gross realized gains	1,264			65			683
Gross realized losses	(78		)	(639		)	—

Schedule of Net Investment Income

Net investment income for the years ended December 31, 2017, 2016 and 2015, is comprised of the following:

Years Ended December 31,	2017			2016		2015
Investment income from continuing operations:
Interest on fixed maturities	$	44,784		$	43,147	$	41,859
Dividends on equity securities	7,108			6,448		6,421
Income on other long-term investments
Investment income	6,870			1,200		1,200
Change in value (1)	(2,812		)	10,178		2,313
Interest on short-term investments	120			47		3
Interest on cash and cash equivalents	1,125			352		234
Other	300			422		433
Total investment income from continuing operations	$	57,495		$	61,794	$	52,463
Less investment expenses	6,305			6,510		5,904
Net investment income from continuing operations	$	51,190		$	55,284	$	46,559
Net investment income from discontinued operations	$	49,720		$	51,538	$	54,222
Net investment income	$	100,910		$	106,822	$	100,781

(1) Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.

Summary of Changes in Net Unrealized Investment Appreciation

A summary of changes in net unrealized investment appreciation for 2017, 2016 and 2015, is as follows for continuing operations and discontinued operations:

	2017			2016			2015
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	25,573		$	(21,271	)	$	(37,621	)
Available-for-sale equity securities	40,168			34,179			(6,459		)
Deferred policy acquisition costs	119			(4,410		)	11,380
Income tax effect	(21,545		)	(2,975		)	11,446
Accumulated effect of change in enacted tax rate	36,658			—			—
Total change in net unrealized investment appreciation, net of tax	$	80,973		$	5,523		$	(21,254	)

Summary of Investments in Unrealized Loss Position

The tables on the following pages summarize our fixed maturity and equity securities that were in an unrealized loss position at December 31, 2017 and 2016 for continuing operations and discontinued operations. The securities are presented by the length of time they have been continuously in an unrealized loss position. It is possible that we could recognize OTTI charges in future periods on securities held at December 31, 2017 if future events or information cause us to determine that a decline in fair value is other-than-temporary.

We have evaluated the near-term prospects of the issuers of our fixed maturity securities in relation to the severity and duration of the unrealized loss and determined that these losses did not warrant the recognition of an OTTI charge in 2017 or 2016. In 2015, we recognized a $1,300 credit loss OTTI on an energy sector fixed maturity security in our Consolidated Statements of Income and Comprehensive Income. This security was in our discontinued operations portfolio. All fixed maturity securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. We believe the unrealized depreciation in value of other securities in our fixed maturity portfolio is primarily attributable to changes in market interest rates and not the credit quality of the issuer. We have no intention to sell and it is more likely than not that we will not be required to sell these securities until the fair value recovers to at least equal to our cost basis or the securities mature.

We have evaluated the near-term prospects of the issuers of our equity securities in relation to the severity and duration of the unrealized loss and, unless otherwise noted, these losses do not warrant the recognition of an OTTI charge at December 31, 2017. There were no OTTI losses on equity securities recognized in 2017, 2016 or 2015. Our largest unrealized loss greater than 12 months on an individual equity security at December 31, 2017, 2016 and 2015 was $158, $188 and $225, respectively. We have no intention to sell any of these securities prior to a recovery in value, but will continue to monitor the fair value reported for these securities as part of our overall process to evaluate investments for OTTI recognition.

December 31, 2017	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	5	$	10,370	$	67	2	$	5,765	$	119	$	16,135	$	186
U.S. government agency	11	64,842		390		5	19,372		327		84,214		717
States, municipalities and political subdivisions
General obligations
Midwest	2	2,177		8		3	19,729		431		21,906		439
Northeast	—	—		—		1	3,644		10		3,644		10
South	3	7,959		32		11	29,545		781		37,504		813
West	2	5,944		18		8	25,755		445		31,699		463
Special revenue
Midwest	2	3,486		15		7	19,130		336		22,616		351
Northeast	1	4,471		37		11	28,476		582		32,947		619
South	8	7,749		107		27	69,917		1,744		77,666		1,851
West	3	5,424		16		22	56,753		1,182		62,177		1,198
Foreign bonds	1	857		49		—	—		—		857		49
Public utilities	8	19,186		79		5	8,446		191		27,632		270
Corporate bonds
Energy	1	2,236		13		1	1,606		97		3,842		110
Industrials	10	27,773		146		2	4,275		95		32,048		241
Consumer goods and services	14	32,781		248		3	6,813		246		39,594		494
Health care	4	9,947		29		—	—		—		9,947		29
Technology, media and telecommunications	12	35,319		122		3	10,413		128		45,732		250
Financial services	22	50,144		256		4	11,389		186		61,533		442
Mortgage-backed securities	10	2,458		18		10	6,641		220		9,099		238
Collateralized mortgage obligations
Government national mortgage association	20	49,764		629		17	46,969		1,645		96,733		2,274
Federal home loan mortgage corporation	11	37,543		577		20	75,679		3,470		113,222		4,047
Federal national mortgage association	11	31,958		342		11	20,123		832		52,081		1,174
Asset-backed securities	1	992		8		—	—		—		992		8
Total Available-for-Sale Fixed Maturities	162	$	413,380	$	3,206	173	$	470,440	$	13,067	$	883,820	$	16,273
Equity securities
Common stocks
Public utilities	—	$	—	$	—	1	$	278	$	30	$	278	$	30
Energy	2	528		120		—	—		—		528		120
Industrials	1	99		13		5	193		107		292		120
Consumer goods and services	—	—		—		2	151		164		151		164
Technology, media and telecommunications	2	466		95		1	4		20		470		115
Financial services	2	193		55		1	9		12		202		67
Total Available-for-Sale Equity Securities	7	$	1,286	$	283	10	$	635	$	333	$	1,921	$	616
Total Available-for-Sale Securities	169	$	414,666	$	3,489	183	$	471,075	$	13,400	$	885,741	$	16,889

December 31, 2016	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	9	$	10,800	$	108	—	$	—	$	—	$	10,800	$	108
U.S. government agency	10	36,593		540		—	—		—		36,593		540
States, municipalities and political subdivisions
General obligations
Midwest	27	40,545		1,412		—	—		—		40,545		1,412
Northeast	9	9,874		231		—	—		—		9,874		231
South	37	53,699		2,355		—	—		—		53,699		2,355
West	30	55,265		2,173		—	—		—		55,265		2,173
Special revenue
Midwest	41	62,937		1,433		—	—		—		62,937		1,433
Northeast	22	54,993		2,624		—	—		—		54,993		2,624
South	79	152,979		6,791		—	—		—		152,979		6,791
West	44	81,676		4,052		—	—		—		81,676		4,052
Public utilities	20	38,511		423		2	2,122		24		40,633		447
Corporate bonds
Energy	8	15,938		313		3	8,232		106		24,170		419
Industrials	24	42,854		596		3	5,641		386		48,495		982
Consumer goods and services	11	21,059		295		—	—		—		21,059		295
Health care	9	20,918		151		—	—		—		20,918		151
Technology, media and telecommunications	16	41,230		516		3	10,241		303		51,471		819
Financial services	37	75,286		1,358		—	—		—		75,286		1,358
Mortgage-backed securities	16	9,611		187		5	1,198		54		10,809		241
Collateralized mortgage obligations
Government national mortgage association	36	82,430		2,261		9	13,603		505		96,033		2,766
Federal home loan mortgage corporation	41	105,775		3,165		3	5,141		241		110,916		3,406
Federal national mortgage association	27	46,633		1,091		4	4,341		243		50,974		1,334
Asset-backed securities	1	971		29		1	2,559		253		3,530		282
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities
Common stocks
Public utilities	—	$	—	$	—	3	$	120	$	188	$	120	$	188
Energy	—	—		—		1	163		22		163		22
Industrials	—	—		—		6	239		173		239		173
Consumer goods and services	3	282		55		2	15		3		297		58
Technology, media and telecommunications	7	26		5		8	33		33		59		38
Financial services	3	53		3		2	150		64		203		67
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765

The following tables are a reconciliation for continuing and discontinued operations of our total fixed maturity and equity securities that were in an unrealized loss position at December 31, 2017 and December 31, 2016. The securities are presented by the length of time they have been continuously in an unrealized loss position:

December 31, 2017	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	88	232,489		1,791		112	302,815		7,161		$	535,304	$	8,952
Discontinued operations	74	180,891		1,415		61	167,625		5,906		348,516		7,321
Total Available-for-Sale Fixed Maturities	162	$	413,380	$	3,206	173	$	470,440	$	13,067	$	883,820	$	16,273
Equity securities:
Continuing operations	5	1,129		236		6	385		303		$	1,514	$	539
Discontinued operations	2	157		47		4	250		30		407		77
Total Available-for-Sale Equity Securities	7	$	1,286	$	283	10	$	635	$	333	$	1,921	$	616
Total Available-for-Sale Securities	169	$	414,666	$	3,489	183	$	471,075	$	13,400	$	885,741	$	16,889

December 31, 2016	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	404	$	654,235	$	23,359	12	$	6,288	$	315	$	660,523	$	23,674
Discontinued operations	150	406,342		8,745		21	46,790		1,800		453,132		10,545
Total Available-for-Sale Fixed Maturities	554	$	1,060,577	$	32,104	33	$	53,078	$	2,115	$	1,113,655	$	34,219
Equity securities:
Continuing operations	12	$	351	$	62	17	$	477	$	254	$	828	$	316
Discontinued operations	1	10		1		5	243		229		253		230
Total Available-for-Sale Equity Securities	13	$	361	$	63	22	$	720	$	483	$	1,081	$	546
Total Available-for-Sale Securities	567	$	1,060,938	$	32,167	55	$	53,798	$	2,598	$	1,114,736	$	34,765

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Carrying Value and Estimated Fair Value of Financial Instruments

A summary of the carrying value and estimated fair value of our financial instruments from continuing operations at December 31, 2017 and 2016 is as follows:

	December 31, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	150	$	150	$	150	$	150
Available-for-sale securities	1,535,070		1,535,070		1,453,286		1,453,286
Trading securities	16,842		16,842		14,390		14,390
Equity securities:
Available-for-sale securities	280,913		280,913		246,370		246,370
Trading securities	6,431		6,431		5,644		5,644
Other long-term investments	49,352		49,352		51,769		51,769
Short-term investments	175		175		175		175
Cash and cash equivalents	95,562		95,562		89,194		89,194
Corporate-owned life insurance	4,029		4,029		2,592		2,592

A summary of the carrying value and estimated fair value of our financial instruments from discontinued operations at December 31, 2017 and 2016 is as follows:

	December 31, 2017				December 31, 2016
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Held-to-maturity securities	$	34	$	34	$	49	$	48
Available-for-sale securities	1,430,025		1,430,025		1,444,840		1,444,840
Equity securities:
Available-for-sale securities	23,653		23,653		24,046		24,046
Mortgage loans	3,594		3,435		3,895		3,706
Policy loans	5,815		5,815		5,366		5,366
Other long-term investments	16,437		16,437		15,870		15,870
Cash and cash equivalents	15,851		15,851		21,659		21,659
Liabilities
Policy reserves
Annuity (accumulations) (1)	$	591,702	$	611,866	$	646,764	$	666,711
Annuity (benefit payments)	147,038		93,560		144,283		95,129

Financial Instruments Measured at Fair Value on Recurring Basis

The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table include financial instruments from both continuing and discontinued operations at December 31, 2017 and 2016:

			Fair Value Measurements
Description	December 31, 2017		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	16,891	$	—	$	16,891	$	—
U.S. government agency	122,168		—		122,168		—
States, municipalities and political subdivisions
General obligations
Midwest	109,696		—		109,696		—
Northeast	48,641		—		48,641		—
South	141,519		—		141,519		—
West	113,011		—		113,011		—
Special revenue
Midwest	158,744		—		158,744		—
Northeast	79,760		—		79,760		—
South	263,512		—		263,512		—
West	158,307		—		158,307		—
Foreign bonds	52,753		—		52,753		—
Public utilities	209,144		—		209,144		—
Corporate bonds
Energy	95,053		—		95,053		—
Industrials	221,707		—		221,707		—
Consumer goods and services	186,257		—		185,589		668
Health care	75,408		—		75,408		—
Technology, media and telecommunications	148,979		—		148,979		—
Financial services	283,151		—		275,474		7,677
Mortgage-backed securities	13,691		—		13,691		—
Collateralized mortgage obligations
Government national mortgage association	157,483		—		157,483		—
Federal home loan mortgage corporation	199,152		—		199,152		—
Federal national mortgage association	105,432		—		105,432		—
Asset-backed securities	4,636		—		3,989		647
Total Available-For-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities
Common stocks
Public utilities	$	22,439	$	22,439	$	—	$	—
Energy	14,565		14,565		—		—
Industrials	66,519		66,517		2		—
Consumer goods and services	25,688		25,688		—		—
Health care	40,103		40,103		—		—
Technology, media and telecommunications	17,508		17,508		—		—
Financial services	116,447		116,447		—		—
Nonredeemable preferred stocks	1,297		415		—		882
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	2,220	$	—	$	2,220	$	—

Consumer goods and services	1,535		—		1,535		—
Health care	3,741		—		3,741		—
Technology, media and telecommunications	1,221		—		1,221		—
Financial services	5,566		—		5,566		—
Redeemable preferred stocks	2,559		2,559		—		—
Equity securities
Public utilities	874		874		—		—
Energy	190		190		—		—
Industrials	989		989		—		—
Consumer goods and services	1,314		1,314		—		—
Health care	325		325		—		—
Financial Services	198		198		—		—
Nonredeemable preferred stocks	2,541		2,541		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

			Fair Value Measurements
Description	December 31, 2016		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	23,195	$	—	$	23,195	$	—
U.S. government agency	77,597		—		77,597		—
States, municipalities and political subdivisions
General obligations
Midwest	144,143		—		144,143		—
Northeast	58,409		—		58,409		—
South	128,369		—		128,369		—
West	113,731		—		113,731		—
Special revenue
Midwest	168,310		—		168,142		168
Northeast	68,065		—		68,065		—
South	239,187		—		239,187		—
West	131,744		—		131,744		—
Foreign bonds	65,234		—		65,234		—
Public utilities	215,674		—		215,674		—
Corporate bonds
Energy	108,860		—		108,860		—
Industrials	229,903		—		229,903		—
Consumer goods and services	181,687		—		180,590		1,097
Health care	83,123		—		83,123		—
Technology, media and telecommunications	144,612		—		144,612		—
Financial services	273,951		—		265,154		8,797
Mortgage-backed securities	17,248		—		17,248		—
Collateralized mortgage obligations
Government national mortgage association	144,460		—		144,460		—
Federal home loan mortgage corporation	174,458		—		174,458		—
Federal national mortgage association	101,896		—		101,896		—
Asset-backed securities	4,270		—		3,821		449
Total Available-For-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities
Common stocks
Public utilities	$	19,671	$	19,671	$	—	$	—
Energy	15,047		15,047		—		—
Industrials	51,794		51,794		—		—
Consumer goods and services	24,117		24,117		—		—
Health care	27,420		27,420		—		—
Technology, media and telecommunications	15,369		15,369		—		—
Financial services	115,950		111,958		—		3,992
Nonredeemable preferred stocks	1,048		453		—		595
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities
Bonds
Corporate bonds
Industrials	$	3,919	$	—	$	3,919	$	—
Consumer goods and services	127		—		127		—
Health care	3,410		—		3,410		—
Technology, media and telecommunications	787		—		787		—

Financial services	4,842		—		4,842		—
Redeemable preferred stocks	1,305		1,305		—		—
Equity securities
Public utilities	613		613		—		—
Energy	286		286		—		—
Industrials	877		877		—		—
Consumer goods and services	1,202		1,202		—		—
Health care	339		339		—		—
Financial Services	206		206		—		—
Nonredeemable preferred stocks	2,121		2,121		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

The following tables are a reconciliation for both continuing and discontinued operations of the presentation of the categorization for our financial instruments measured at fair value on a recurring basis at December 31, 2017 and 2016:

December 31, 2017			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,535,070	$	—	$	1,534,323	$	747
Discontinued operations	1,430,025		—		1,421,780		8,245
Total Available-for-Sale Fixed Maturities	$	2,965,095	$	—	$	2,956,103	$	8,992
Equity securities:
Continuing operations	$	280,913	$	280,031	$	—	$	882
Discontinued operations	23,653		23,651		2		—
Total Available-for-Sale Equity Securities	$	304,566	$	303,682	$	2	$	882
Total Available-for-Sale Securities	$	3,269,661	$	303,682	$	2,956,105	$	9,874
TRADING
Fixed maturities:
Continuing operations	$	16,842	$	2,559	$	14,283	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	6,431		6,431		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	23,273	$	8,990	$	14,283	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	6,147	$	6,147	$	—	$	—
Discontinued operations	10,677		10,677		—		—
Money Market Accounts	$	16,824	$	16,824	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	4,029	$	—	$	4,029	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	4,029	$	—	$	4,029	$	—
Total Assets Measured at Fair Value	$	3,313,962	$	329,671	$	2,974,417	$	9,874

December 31, 2016			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Continuing operations	$	1,453,286	$	—	$	1,452,737	$	549
Discontinued operations	1,444,840		—		1,434,878		9,962
Total Available-for-Sale Fixed Maturities	$	2,898,126	$	—	$	2,887,615	$	10,511
Equity securities:
Continuing operations	$	246,370	$	243,627	$	—	$	2,743
Discontinued operations	24,046		22,202		—		1,844
Total Available-for-Sale Equity Securities	$	270,416	$	265,829	$	—	$	4,587
Total Available-for-Sale Securities	$	3,168,542	$	265,829	$	2,887,615	$	15,098
TRADING
Fixed maturities:
Continuing operations	$	14,390	$	1,305	$	13,085	$	—
Discontinued operations	—		—		—		—
Equity securities:
Continuing operations	5,644		5,644		—		—
Discontinued operations	—		—		—		—
Total Trading Securities	$	20,034	$	6,949	$	13,085	$	—
SHORT-TERM INVESTMENTS
Continuing operations	$	175	$	175	$	—	$	—
Discontinued operations	—		—		—		—
Short-Term Investments	$	175	$	175	$	—	$	—
MONEY MARKET ACCOUNTS
Continuing operations	$	4,810	$	4,810	$	—	$	—
Discontinued operations	11,992		11,992		—		—
Money Market Accounts	$	16,802	$	16,802	$	—	$	—
CORPORATE-OWNED LIFE INSURANCE
Continuing operations	$	2,592	$	—	$	2,592	$	—
Discontinued operations	—		—		—		—
Corporate-Owned Life Insurance	$	2,592	$	—	$	2,592	$	—
Total Assets Measured at Fair Value	$	3,208,145	$	289,755	$	2,903,292	$	15,098

Summary of Changes in Fair Value of Level 3 Securities

The following table provides a summary of the changes in fair value of our Level 3 securities, from both continuing and discontinued operations for 2017:

	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities		Equities			Total
Balance at January 1, 2017	$	168		$	9,894		$	449	$	4,587		$	15,098
Unrealized gains (losses) (1)	(8		)	(129		)	198		287			348
Purchases	—			100			—		145			245
Disposals	(160		)	(1,520		)	—		(4,137		)	(5,817		)
Balance at December 31, 2017	$	—		$	8,345		$	647	$	882		$	9,874

(1) Realized gains (losses) are recorded as a component of earnings, whereas unrealized gains (losses) are recorded as a component of comprehensive income.

The following table provides a summary of the changes in fair value of our Level 3 securities, from both continuing and discontinued operations for 2016:

	States, municipalities and political subdivisions			Corporate bonds			Asset-backed securities			Equities			Total
Balance at January 1, 2016	$	343		$	10,895		$	1,036		$	3,978		$	16,252
Realized gains (losses) (1)	—			—			—			—			—
Unrealized gains (losses) (1)	(15		)	134			(39		)	—			80
Purchases	—			—			—			727			727
Disposals	(160		)	(1,135		)	(548		)	(118		)	(1,961		)
Balance at December 31, 2016	$	168		$	9,894		$	449		$	4,587		$	15,098

(1) Realized gains (losses) are recorded as a component of earnings, whereas unrealized gains (losses) are recorded as a component of comprehensive income.

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REINSURANCE (Tables)

12 Months Ended

Dec. 31, 2017

Reinsurance Disclosures [Abstract]

Ceded and Assumed Reinsurance

Premiums and losses and loss settlement expenses related to our ceded business are as follows:

Years Ended December 31,	2017		2016		2015
Ceded Business
Ceded insurance in-force	$	1,014,794	$	1,023,197	$	1,165,868
Ceded premiums earned	2,722		2,768		3,161
Loss and loss settlement expenses ceded	3,726		3,359		2,113

Premiums and losses and loss settlement expenses related to our ceded and assumed business are as follows:

Years Ended December 31,	2017		2016		2015
Ceded Business
Ceded premiums written	$	61,273	$	57,988	$	56,916
Ceded premiums earned	61,305		57,996		56,758
Loss and loss settlement expenses ceded	33,303		13,278		3,868
Assumed Business
Assumed premiums written	$	15,179	$	16,834	$	18,290
Assumed premiums earned	15,059		17,037		18,396
Loss and loss settlement expenses assumed	24,688		9,814		14,415

Reinsurance Programs and Retentions

The following table provides a summary of our primary reinsurance programs. Retention amounts reflect the accumulated retentions and co-participation of all layers within a program. For 2017, there was an all lines annual aggregate excess of loss program with variable retention of 7.02 percent of gross net earned premium with a minimum retention of $58.5 million and a maximum of $71.5 million. Our all lines aggregate recovery is also limited to $30.0 million. For 2016, there was an all lines annual aggregate excess of loss program with a variable retention of 7.73 percent of gross net earned premium with a minimum retention of $52.0 million and a maximum of $65.0 million. Our all lines aggregate recovery is also limited to a maximum of $30.0 million. For 2015, there was a $4,000 aggregate annual deductible on our multi-line core program (casualty excess and property excess).

	2017 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,500	$	60,000	100	%	of	$	57,500
Property excess of loss	2,500		25,000		100	%	of	$	22,500
Surety excess of loss	1,500		45,000		100	%	of	$	43,500
Property catastrophe, excess	20,000		250,000		100	%	of	$	230,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

	2016 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,500	$	40,000	100	%	of	$	37,500
Property excess of loss	2,500		25,000		100	%	of	$	22,500
Surety excess of loss	1,500		36,000		100	%	of	$	34,500
Property catastrophe, excess	20,000		250,000		100	%	of	$	230,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

	2015 Reinsurance Programs
Type of Reinsurance	Stated Retention		Limits		Coverage
Casualty excess of loss	$	2,000	$	40,000	100	%	of	$	38,000
Property excess of loss	2,000		25,000		100	%	of	$	23,000
Surety excess of loss	1,500		36,000		96	%	of	$	34,500
Property catastrophe, excess	20,000		200,000		100	%	of	$	180,000
Property catastrophe, excess	200,000		250,000		90.5	%	of	$	50,000
Boiler and machinery	N/A		50,000		100	%	of	$	50,000

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES (Tables)

12 Months Ended

Dec. 31, 2017

Insurance Loss Reserves [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves for 2017, 2016 and 2015 (net of reinsurance amounts):

Years Ended December 31,	2017			2016			2015
Gross liability for losses and loss settlement expenses at beginning of year	$	1,123,896		$	1,003,895		$	969,437
Ceded losses and loss settlement expenses	(59,794		)	(54,653		)	(63,757		)
Net liability for losses and loss settlement expenses at beginning of year	$	1,064,102		$	949,242		$	905,680
Losses and loss settlement expenses incurred for claims occurring during
Current year	$	779,966		$	683,662		$	560,482
Prior years	(54,253		)	(31,229		)	(40,395		)
Total incurred	$	725,713		$	652,433		$	520,087
Losses and loss settlement expense payments for claims occurring during
Current year	$	311,972		$	277,053		$	225,022
Prior years	313,531			260,520			251,503
Total paid	$	625,503		$	537,573		$	476,525
Net liability for losses and loss settlement expenses at end of year	$	1,164,312		$	1,064,102		$	949,242
Ceded loss and loss settlement expenses	59,871			59,794			54,653
Gross liability for losses and loss settlement expenses at end of year	$	1,224,183		$	1,123,896		$	1,003,895

Short-duration Insurance Contracts, Claims Development

The following tables provide information about incurred and paid losses and loss settlement expense development as of December 31, 2017, net of reinsurance, as well as cumulative development, cumulative claim frequency and IBNR liabilities. Claim data for Mercer Insurance Group, which was acquired on March 28, 2011, is presented retrospectively.

The cumulative number of reported claims, for calendar year 2017 and 2016, are counted for all lines of business on a per claimant per coverage basis and a single event may result in multiple claims due to the involvement of multiple individual claimants and / or multiple independent coverages. Claim counts for calendar years 2015 and prior are counted on a per claim and per coverage basis. Claim counts include open claims, claims that have been paid and closed, and reported claims that have been closed without the need for any payment.

Line of business: Commercial other liability
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	79,455	$	84,944	$	81,963	$	73,892	$	63,231	$	78,152	$	75,178	$	74,115	$	74,915	$	75,364	$	12,636	(4,091	)	6,734
2009			88,298		85,991		73,545		65,831		84,286		83,660		85,761		86,757		86,543		11,268		(1,755	)	6,123
2010					88,987		69,533		65,299		82,865		78,564		77,948		78,291		78,498		14,468		(10,489	)	5,174
2011							81,522		64,738		88,371		88,200		79,591		80,801		81,463		15,016		(59	)	5,328
2012									100,389		96,158		94,195		91,980		92,537		91,346		18,407		(9,043	)	5,540
2013											104,982		91,460		90,502		86,119		85,399		9,697		(19,583	)	6,007
2014													118,928		117,958		106,486		97,809		13,583		(21,119	)	6,109
2015															137,386		125,307		120,005		25,634		(17,381	)	7,083
2016																	139,144		130,041		35,760		(9,103	)	7,512
2017																			139,602		68,465				5,833
																	Total		$	986,070

Line of business: Commercial other liability
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	9,220	$	24,096	$	34,482	$	42,545	$	47,112	$	50,143	$	52,659	$	55,843	$	59,052	$	60,698
2009			8,375		21,151		32,073		41,696		50,098		56,789		63,149		67,733		70,814
2010					7,103		15,230		24,577		35,043		51,336		56,761		60,116		62,070
2011							6,236		13,670		26,260		40,595		50,146		56,150		62,165
2012									6,875		24,620		39,948		55,316		64,574		69,800
2013											9,835		25,228		39,953		54,559		65,773
2014													10,207		29,679		50,211		70,363
2015															11,185		27,182		53,901
2016																	13,782		38,184
2017																			17,716
																	Total		$	571,484
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														29,167
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	443,753

Line of business: Commercial fire and allied
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	157,303	$	141,384	$	138,602	$	140,321	$	134,821	$	116,940	$	118,115	$	118,376	$	118,329	$	118,308	$	44	(38,995	)	21,101
2009			113,754		106,085		105,031		105,614		87,751		87,845		87,932		88,891		89,027		154		(24,727	)	18,038
2010					113,139		106,152		108,246		83,836		83,932		83,767		83,981		84,213		229		(28,926	)	16,671
2011							148,220		142,330		117,082		120,492		119,820		120,219		121,434		611		(26,786	)	16,026
2012									138,602		110,448		108,774		108,047		107,958		108,623		970		(29,979	)	6,408
2013											91,521		88,550		91,498		92,212		93,826		1,139		2,305		6,598
2014													126,216		131,198		128,762		128,185		1,397		1,969		7,827
2015															103,177		108,293		110,633		3,370		7,456		7,465
2016																	147,473		144,208		3,597		(3,265	)	9,496
2017																			155,139		16,178				11,574
																	Total		$	1,153,596

Line of business: Commercial fire and allied
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	80,005	$	102,804	$	107,480	$	112,678	$	115,804	$	115,897	$	117,553	$	117,690	$	118,003	$	118,059
2009			53,219		72,181		77,732		82,809		86,930		87,544		87,721		88,037		88,159
2010					52,660		72,271		78,284		80,352		82,037		83,000		83,374		83,915
2011							85,585		104,800		109,429		112,497		116,614		118,183		120,178
2012									71,008		94,380		100,078		103,197		105,250		106,521
2013											59,331		78,226		82,853		86,115		89,200
2014													84,456		113,663		116,750		122,370
2015															67,217		90,454		95,515
2016																	92,895		125,962
2017																			99,484
																	Total		$	1,049,363
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														573
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	104,806

Line of business: Commercial automobile
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	80,461	$	78,391	$	76,051	$	76,527	$	75,070	$	75,021	$	73,506	$	73,431	$	73,463	$	73,487	$	12	(6,974	)	18,114
2009			80,021		69,328		68,569		64,121		64,516		63,605		63,560		63,567		63,509		—		(16,512	)	15,019
2010					75,781		68,068		65,860		67,015		67,563		67,296		68,086		67,910		17		(7,871	)	16,245
2011							84,887		87,299		90,750		92,519		92,379		91,336		90,766		311		5,879		15,246
2012									100,039		90,848		94,755		95,321		96,594		96,389		488		(3,650	)	14,353
2013											104,356		98,037		102,943		103,726		104,980		1,310		624		15,504
2014													107,723		106,076		113,720		118,869		3,634		11,146		17,222
2015															125,506		129,816		132,206		7,874		6,700		19,875
2016																	174,018		175,357		21,439		1,339		26,662
2017																			227,919		58,850				28,858
																	Total		$	1,151,392

Line of business: Commercial automobile
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	30,527	$	47,271	$	58,926	$	68,629	$	70,459	$	72,122	$	72,984	$	72,990	$	73,018	$	73,394
2009			27,674		44,867		53,451		58,087		61,398		62,732		63,495		63,503		63,508
2010					29,329		41,141		52,953		57,947		62,231		65,169		67,622		67,852
2011							34,332		50,931		65,021		79,383		85,348		87,475		88,609
2012									39,247		57,201		71,469		82,944		90,292		93,179
2013											43,592		67,630		79,663		90,780		96,375
2014													45,704		68,033		87,590		99,922
2015															50,782		78,225		99,201
2016																	66,013		103,528
2017																			81,311
																	Total		$	866,879
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														39
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	284,552

Line of business: Workers' compensation
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	42,739	$	42,301	$	39,895	$	41,278	$	40,474	$	40,010	$	39,386	$	39,680	$	39,768	$	38,664	$	499	(4,075	)	5,057
2009			43,560		39,009		36,294		36,837		36,823		36,158		36,014		35,026		35,012		489		(8,548	)	4,264
2010					38,210		42,531		41,180		41,167		40,647		41,422		41,468		42,617		596		4,407		3,978
2011							39,967		38,481		35,352		34,309		33,585		33,314		33,352		747		(6,615	)	3,930
2012									48,848		46,279		42,158		38,423		38,553		39,015		754		(9,833	)	3,813
2013											64,048		62,579		56,369		54,584		52,761		975		(11,287	)	4,173
2014													64,051		60,729		58,284		56,630		1,409		(7,421	)	4,593
2015															53,788		55,578		51,003		1,753		(2,785	)	5,311
2016																	70,419		66,575		3,392		(3,844	)	6,732
2017																			76,184		7,317				5,460
																	Total		$	491,813

Line of business: Workers' compensation
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	10,082	$	21,227	$	25,736	$	30,123	$	31,980	$	33,770	$	34,319	$	34,862	$	35,292	$	36,010
2009			10,478		20,292		24,189		27,747		29,898		31,003		31,886		32,911		33,117
2010					11,821		22,606		28,765		31,887		33,119		34,143		35,052		38,973
2011							10,322		21,678		26,033		27,497		28,247		29,022		29,453
2012									11,802		23,023		28,397		30,933		33,063		34,330
2013											14,136		30,209		38,023		42,941		45,078
2014													13,965		30,289		38,441		42,964
2015															12,063		27,304		35,229
2016																	14,413		32,345
2017																			14,647
																	Total		$	342,146
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														18,973
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	168,640

Line of business: Personal
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2017
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development		Cumulative number of reported claims
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	49,961	$	44,686	$	43,408	$	43,672	$	43,577	$	43,535	$	43,515	$	43,482	$	42,882	$	42,881	$	—	(7,080	)	15,821
2009			34,597		33,519		31,945		32,026		32,134		32,029		32,085		32,070		31,867		2		(2,730	)	13,502
2010					36,686		34,347		33,928		33,865		33,403		33,413		33,432		33,213		29		(3,473	)	13,325
2011							50,014		48,534		47,090		47,035		46,968		47,013		46,733		74		(3,281	)	14,843
2012									47,924		46,199		46,403		46,150		44,715		44,352		108		(3,572	)	10,769
2013											39,232		38,525		37,262		37,086		36,729		172		(2,503	)	9,232
2014													53,910		52,661		52,944		52,782		236		(1,128	)	10,899
2015															42,848		41,088		40,336		396		(2,512	)	9,490
2016																	48,072		45,840		733		(2,232	)	11,674
2017																			60,330		3,310				13,049
																	Total		$	435,063

Line of business: Personal
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(Unaudited)
2008	$	32,032	$	40,114	$	41,735	$	42,414	$	42,613	$	42,627	$	42,748	$	42,748	$	42,787	$	42,881
2009			22,086		27,926		29,801		30,829		31,564		31,644		31,718		31,804		31,837
2010					24,499		29,867		31,340		32,076		32,771		32,997		33,165		33,158
2011							36,489		43,801		45,306		45,949		46,487		46,573		46,575
2012									30,415		41,979		43,375		44,448		43,569		44,139
2013											25,505		32,788		34,297		35,306		36,155
2014													37,055		47,912		49,710		51,837
2015															29,551		37,431		39,027
2016																	32,999		40,910
2017																			42,135
																	Total		$	408,654
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance														1,326
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	27,735

Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability

The reconciliation of the net incurred and loss development tables to the liability for unpaid losses and loss settlement expenses in the consolidated statement of financial position is as follows.

	December 31, 2017
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses:
Commercial other liability	$	443,753
Commercial fire and allied	104,806
Commercial automobile	284,552
Commercial workers' compensation	168,640
Personal	27,735
All other lines	43,709
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	1,073,195
Net outstanding liabilities for unpaid unallocated loss settlement expenses	88,193
Fair value adjustment (purchase accounting adjustment for Mercer acquisition)	2,924
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	1,164,312
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses:
Commercial other liability	20,367
Commercial fire and allied	10,806
Commercial automobile	1,994
Commercial workers' compensation	26,799
Personal	26
All other lines	2,675
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	62,667
Reinsurance fair value amortization (purchase accounting adjustment for Mercer acquisition)	(2,796		)
Total reinsurance recoverable on unpaid losses and loss settlement expenses	59,871
Total gross liability for unpaid losses and loss settlement expenses	$	1,224,183

Short-duration Insurance Contracts, Schedule of Historical Claims Duration

The following is supplementary information about average historical claims duration as of December 31, 2017.

	Average annual percentage payout of incurred claims by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	(Unaudited)
Commercial other liability	10.1	%	15.9	%	16.4	%	15.3	%	11.9	%	6.4	%	5.6	%	4.0	%	3.9	%	2.2	%
Commercial fire and allied	64.4	%	20.9	%	4.8	%	3.7	%	3.0	%	0.9	%	0.9	%	0.4	%	0.2	%	—	%
Commercial automobile	39.9	%	20.9	%	15.1	%	10.9	%	5.6	%	2.8	%	1.8	%	0.1	%	—	%	0.5	%
Commercial workers' compensation	26.1	%	29.0	%	13.6	%	8.1	%	4.3	%	3.2	%	1.8	%	4.5	%	0.8	%	1.9	%
Personal	71.9	%	19.1	%	4.0	%	2.5	%	1.1	%	0.5	%	0.3	%	0.1	%	0.1	%	0.2	%

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STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS (Tables)

12 Months Ended

Dec. 31, 2017

Statutory Insurance Financial Information [Abstract]

Schedule of Statutory Capital and Surplus

Statutory capital and surplus in regards to policyholders at December 31, 2017, 2016 and 2015 and statutory net income (loss) for the years then ended are as follows:

	Statutory Capital and Surplus		Statutory Net Income (Loss)
2017
Property and casualty business	$	757,443	$	19,687
Life, accident and health business	144,533		5,485
2016
Property and casualty business	$	770,908	$	39,087
Life, accident and health business	139,806		(3,177		)
2015
Property and casualty business	$	722,404	$	75,554
Life, accident and health business	138,855		(1,524		)

(1) Because United Fire & Casualty Company owns United Life Insurance Company, the property and casualty statutory capital and surplus includes life, accident and health statutory capital and surplus, and therefore represents our total consolidated statutory capital and surplus.

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FEDERAL INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Federal Income Tax Expense (Benefit)

Federal income tax expense (benefit) from both continuing and discontinued operations is composed of the following:

Years Ended December 31,	2017			2016		2015
Current	$	1,989		$	3,239	$	37,649
Deferred	(26,719		)	5,524		(5,324		)
Total	$	(24,730	)	$	8,763	$	32,325

Income Tax Expense Reconciliation

A reconciliation of income tax expense (benefit) computed at the applicable federal tax rate of 35.0 percent to the amount recorded in the accompanying Consolidated Statements of Income and Comprehensive Income is as follows:

Years Ended December 31,	2017			2016			2015
Computed expected income tax expense	$	9,202		$	20,533		$	42,508
Impact of enactment of Tax Act	(21,884		)	—			—
Tax-exempt municipal bond interest income	(8,875		)	(8,330		)	(7,669		)
Nontaxable dividend income	(1,540		)	(1,317		)	(1,337		)
Valuation allowance reduction	(547		)	(547		)	(548		)
Other, net	(1,086		)	(1,576		)	(629		)
Consolidated federal income tax expense (benefit)	$	(24,730	)	$	8,763		$	32,325
Reconciliation of consolidated federal income tax expense (benefit) from:
Continuing operations	$	(29,220	)	$	8,379		$	30,050
Discontinued operations	4,490			384			2,275
Consolidated federal income tax expense (benefit)	$	(24,730	)	$	8,763		$	32,325

Components of Net Deferred Tax Liability

The significant components of our net deferred tax liability from both continuing and discontinued operations at December 31, 2017 and 2016 are as follows:

December 31,	2017			2016
Deferred tax liabilities
Net unrealized appreciation on investment securities:
Equity securities	$	50,839		$	70,640
All other securities	7,599			3,711
Deferred policy acquisition costs	30,404			52,031
Investments in partnerships	3,653			8,112
Prepaid pension cost	3,416			4,449
Net bond discount accretion	666			1,134
Depreciation	593			854
Revaluation of investment basis (1)	545			1,342
Identifiable intangible assets (1)	1,838			3,311
Other	1,934			2,831
Gross deferred tax liability	$	101,487		$	148,415
Deferred tax assets
Financial statement reserves in excess of income tax reserves	$	17,036		$	29,174
Unearned premium adjustment	19,389			30,697
Net operating loss carryforwards	329			718
Underfunded benefit plan obligation	12,375			13,374
Post-retirement benefits other than pensions	11,942			20,221
Other-than-temporary impairment of investments	2,313			4,658
Contingent ceding commission accrual	317			2,769
Alternative minimum tax credit carryforward	6,011			1,194
Compensation expense related to stock options	3,289			4,578
Other	4,145			6,162
Gross deferred tax asset	$	77,146		$	113,545
Valuation allowance	(329		)	(718		)
Deferred tax asset	$	76,817		$	112,827
Net deferred tax liability	$	24,670		$	35,588

(1) Related to our acquisition of Mercer Insurance Group.

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EMPLOYEE BENEFITS (Tables)

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

Summary of Actual and Target Asset Allocation of Plan Assets

The following is a summary of the pension plan's actual and target asset allocations at December 31, 2017 and 2016 by asset category:

									Target
Pension Plan Assets	2017		% of Total		2016		% of Total		Allocation
Fixed maturity securities - corporate bonds	$	11,003	7.0	%	$	9,451	7.4	%	0	%	-	15	%
Redeemable preferred stock	3,216		2.0		3,144		2.4		0	%	-	10	%
Equity securities	87,603		55.6		69,770		54.3		50	%	-	70	%
Pooled separate accounts
Core plus bond separate account fund	17,948		11.4		10,401		8.1		0	%	-	40	%
U.S. property separate account fund	15,502		9.8		14,330		11.1		0	%	-	25	%
Arbitrage fund	8,506		5.4		8,292		6.5		0	%	-	10	%
United Life annuity	9,846		6.2		9,377		7.3		5	%	-	10	%
Cash and cash equivalents	4,020		2.6		3,665		2.9		0	%	-	10	%
Total plan assets	$	157,644	100.0	%	$	128,430	100.0	%

Categories of Pension Plan Assets at Fair Value on Recurring Basis

The following tables present the categorization of the pension plan's assets measured at fair value on a recurring basis at December 31, 2017 and 2016:

			Fair Value Measurements
Description	December 31, 2017		Level 1		Level 2		Level 3
Fixed maturity securities - corporate bonds	$	11,003	$	—	$	11,003	$	—
Redeemable preferred stock	3,216		3,216		—		—
Equity securities	87,603		87,603		—		—
Pooled separate accounts
Core plus bond separate account fund	17,948		—		17,948		—
U.S. property separate account fund	15,502		—		—		15,502
Arbitrage fund	8,506		—		8,506		—
Money market funds	4,011		4,011		—		—
Total assets measured at fair value	$	147,789	$	94,830	$	37,457	$	15,502

			Fair Value Measurements
Description	December 31, 2016		Level 1		Level 2		Level 3
Fixed maturity securities - corporate bonds	$	9,451	$	—	$	9,451	$	—
Redeemable preferred stock	3,144		3,144		—		—
Equity securities	69,770		69,770		—		—
Pooled separate accounts
Core plus bond separate account fund	10,401		—		10,401		—
U.S. property separate account fund	14,330		—		—		14,330
Arbitrage fund	8,292		—		8,292		—
Money market funds	3,659		3,659		—		—
Total assets measured at fair value	$	119,047	$	76,573	$	28,144	$	14,330

Summary of Changes in Fair Value of Pension Plan Securities

The following tables provide a summary of the changes in fair value of the pension plan's Level 3 securities:

	U.S. property separate account fund
Balance at January 1, 2017	$	14,330
Unrealized gains	1,172
Balance at December 31, 2017	$	15,502

	U.S. property separate account fund
Balance at January 1, 2016	$	11,252
Unrealized gains	1,078
Purchases	2,000
Balance at December 31, 2016	$	14,330

Schedule of Actuarial Assumptions Used

The following actuarial assumptions were used to determine the reported plan benefit obligations at December 31:

Weighted-average assumptions as of	Pension Benefits				Post-retirement Benefits
December 31,	2017		2016		2017		2016
Discount rate	3.65	%	4.17	%	3.65	%	4.17	%
Rate of compensation increase	3.00		3.00		N/A		N/A

The following actuarial assumptions were used at January 1 to determine our reported net periodic benefit costs for the year ended December 31:

Weighted-average assumptions as of	Pension Benefits						Post-retirement Benefits
January 1,	2017		2016		2015		2017		2016		2015
Discount rate	4.17	%	4.21	%	3.86	%	4.17	%	4.21	%	3.86	%
Expected long-term rate of return on plan assets	7.50		7.50		7.50		N/A		N/A		N/A
Rate of compensation increase	3.00		3.00		3.00		N/A		N/A		N/A

Schedule of Health Care Cost Trend Rates

	Health Care Benefits				Dental Claims
Years Ended December 31,	2017		2016		2017		2016
Health care cost trend rates assumed for next year	7.00	%	7.00	%	4.00	%	4.00	%
Rate to which the health care trend rate is assumed to decline (ultimate trend rate)	4.50	%	4.50	%	N/A		N/A
Year that the rate reaches the ultimate trend rate	2026		2025		N/A		N/A

Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

A 1.0 percent change in assumed health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
Effect on the net periodic post-retirement health care benefit cost	$	1,126	$	(883	)
Effect on the accumulated post-retirement benefit obligation	9,487		(7,698		)

Reconciliation of Benefit Obligations, Plan Assets, and Funded Status

The following table provides a reconciliation of benefit obligations, plan assets and funded status of our plans:

	Pension Benefits						Post-retirement Benefits
Years Ended December 31,	2017			2016			2017			2016
Reconciliation of benefit obligation
Benefit obligation at beginning of year	$	171,876		$	160,390		$	46,785		$	72,175
Service cost	6,857			6,490			2,021			3,728
Interest cost	7,060			6,654			1,927			3,015
Actuarial loss	26,963			2,215			6,326			1,468
Adjustment for plan amendment	—			—			—			(32,289		)
Benefit payments	(4,407		)	(3,873		)	(1,331		)	(1,312		)
Benefit obligation at end of year (1)	$	208,349		$	171,876		$	55,728		$	46,785
Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year	$	128,430		$	106,600		$	—		$	—
Actual return on plan assets	22,225			9,320			—			—
Employer contributions	11,396			16,383			1,331			1,311
Benefit payments	(4,407		)	(3,873		)	(1,331		)	(1,311		)
Fair value of plan assets at end of year	$	157,644		$	128,430		$	—		$	—
Funded status at end of year	$	(50,705	)	$	(43,446	)	$	(55,728	)	$	(46,785	)

(1) For the pension plan, the benefit obligation is the projected benefit obligation. For the post-retirement benefit plan, the benefit obligation is the accumulated post-retirement benefit obligation.

Schedule of Amounts Recognized in AOCI

The following table displays the effect that the unrecognized prior service cost and unrecognized actuarial loss of our plans had on accumulated other comprehensive income ("AOCI"), as reported in the accompanying Consolidated Balance Sheets:

	Pension Benefits				Post-retirement Benefits
Years Ended December 31	2017		2016		2017			2016
Amounts recognized in AOCI
Unrecognized prior service cost	$	—	$	—	$	(26,880	)	$	(32,289	)
Unrecognized actuarial (gain) loss	60,571		49,745		25,235			20,756
Total amounts recognized in AOCI	$	60,571	$	49,745	$	(1,645	)	$	(11,533	)

Components of Net Periodic Benefit Cost

The components of the net periodic benefit cost for our pension and post-retirement benefit plans are as follows:

	Pension Plan									Post-retirement Benefit Plan
Years Ended December 31,	2017			2016			2015			2017			2016		2015
Net periodic benefit cost
Service cost	$	6,857		$	6,490		$	6,675		$	2,021		$	3,728	$	5,220
Interest cost	7,060			6,654			5,999			1,927			3,015		2,856
Expected return on plan assets	(9,650		)	(7,952		)	(7,800		)	—			—		—
Amortization of prior service cost	—			—			—			(5,409		)	—		—
Amortization of net loss	3,562			3,968			4,546			1,846			1,518		2,920
Net periodic benefit cost	$	7,829		$	9,160		$	9,420		$	385		$	8,261	$	10,996

Summary of Expected Benefit Payments

The following table summarizes the expected benefits to be paid from our plans over the next 10 years:

	2018		2019		2020		2021		2022		2023 - 2027
Pension benefits	$	5,620	$	6,140	$	6,780	$	7,520	$	8,240	$	52,950
Post-retirement benefits	$	1,350	$	1,540	$	1,700	$	1,880	$	2,050	$	13,310

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STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Activity in Stock Award Plans

The activity in the Director Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Year Ended December 31, 2017		From Inception to December 31, 2017
Beginning balance	74,771		300,000
Number of awards granted	(12,958	)	(262,190	)
Number of awards forfeited or expired	—		24,003
Ending balance	61,813		61,813
Number of option awards exercised	36,808		89,281
Number of restricted stock awards vested	22,716		54,272

The activity in the Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Year Ended December 31, 2017		From Inception to December 31, 2017
Beginning balance	1,248,651		1,900,000
Additional shares authorized	—		1,500,000
Number of awards granted	(259,405	)	(2,871,971	)
Number of awards forfeited or expired	7,582		468,799
Ending balance	996,828		996,828
Number of option awards exercised	136,827		1,085,895
Number of unrestricted stock awards granted	1,145		8,470
Number of restricted stock awards vested	1,198		38,168

Recognition of Stock-Based Compensation Expense

We expect this compensation to be recognized in subsequent years according to the following table, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated.

2018	$	4,028
2019	2,776
2020	1,116
2021	390
2022	40
Total	$	8,350

Analysis of Award Activity

The analysis below details the award activity for 2017 and the awards outstanding at December 31, 2017, for both of our plans and ad hoc options, which were granted prior to the adoption of the other plans:

Options	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Life (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	1,120,677		$	29.08
Granted	159,709		41.75
Exercised	(173,635	)	27.52
Forfeited or expired	(5,700	)	28.66
Outstanding at December 31, 2017	1,101,051		$	31.16	6.52	$	15,875
Exercisable at December 31, 2017	495,089		$	26.77	3.22	$	9,311

Schedule of Restricted Stock Award Activity

The analysis below details the award activity for the restricted stock and restricted stock unit awards outstanding at December 31, 2017:

Restricted stock awards	Shares		Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2017	182,086		$	34.08
Granted	111,509		41.94
Vested	(23,914	)	36.77
Forfeited	(1,882	)	40.27
Non-vested at December 31, 2017	267,799		$	37.07

Weighted-average Grant-Date Fair Value Assumptions

The weighted-average grant-date fair value of the options granted under our plans has been estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

December 31,	2017			2016			2015
Risk-free interest rate	2.23		%	1.53		%	1.94		%
Expected volatility	27.58		%	25.44		%	21.92		%
Expected option life (in years)	7			7			7
Expected dividends (in dollars)	$	1.00		$	0.88		$	0.80
Weighted-average grant-date fair value of options granted during the year (in dollars)	$	9.93		$	8.42		$	4.98

Summary of Stock Options Outstanding and Exercisable

The following table summarizes information regarding the stock options outstanding and exercisable at December 31, 2017:

				Options Outstanding				Options Exercisable
Range of Exercise Prices				Number Outstanding (in shares)	Weighted-Average Remaining Contractual Life (in years)	Weighted-Average Exercise Price		Number Exercisable (in shares)	Weighted-Average Exercise Price
$	15.01	-	21.00	100,805	3.23	$	20.24	100,805	$	20.24
21.01		-	28.00	159,478	4.52	23.38		127,077	23.23
28.01		-	35.00	508,630	6.42	29.49		235,833	29.74
35.01		-	43.00	332,138	8.63	40.77		31,374	39.84
$	15.01	-	43.00	1,101,051	6.52	$	31.16	495,089	$	26.77

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SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Premiums Earned by Segments

The following table sets forth our net premiums earned:

Years Ended December 31,	2017		2016		2015
Continuing Operations - Property and casualty insurance business
Net premiums earned
Other liability	$	306,480	$	289,982	$	261,303
Fire and allied lines	270,716		265,221		246,450
Automobile	277,511		239,216		210,090
Workers' compensation	104,166		103,605		95,672
Fidelity and surety	24,981		22,507		21,362
Reinsurance assumed	10,650		12,765		13,639
Other	2,988		2,835		3,179
Total net premiums earned from continuing operations	$	997,492	$	936,131	$	851,695
Discontinued Operations - Life insurance business
Net premiums earned
Ordinary life (excluding universal life)	$	35,388	$	63,668	$	53,114
Universal life policy fees	13,145		11,577		12,834
Immediate annuities with life contingencies	11,691		10,533		12,223
Accident and health	1,096		1,434		1,425
Other	48		58		388
Total net premiums earned from discontinued operations	$	61,368	$	87,270	$	79,984

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QUARTERLY SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Data [Abstract]

Schedule of Unaudited Quarterly Financial Information

The following table sets forth our selected unaudited quarterly financial information from continuing operations:

(In Thousands Except Share Data)
Quarters	First		Second			Third			Fourth		Total
Year Ended December 31, 2017
Total revenues	$	251,278	$	258,487		$	269,617		$	273,355	$	1,052,737
Income (loss) before income taxes	23,006		(4,331		)	(32,394		)	29,369		15,650
Net income (loss)	$	18,584	$	109		$	(19,082	)	$	45,259	$	44,870
Basic earnings per share (1)	$	0.73	$	—		$	(0.77	)	$	1.81	$	1.79
Diluted earnings per share (1)	0.72		—			(0.77		)	1.78		1.75
Year Ended December 31, 2016
Total revenues	$	231,334	$	244,866		$	255,625		$	264,537	$	996,362
Income before income taxes	28,165		1,372			14,035			13,925		57,497
Net income	$	22,020	$	3,435		$	11,628		$	12,035	$	49,118
Basic earnings per share (1)	$	0.87	$	0.13		$	0.46		$	0.46	$	1.94
Diluted earnings per share (1)	0.86		0.13			0.45			0.46		1.90

(1) The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.

The following table sets forth our selected unaudited quarterly financial information from discontinued operations:

(In Thousands Except Share Data)
Quarters	First		Second			Third		Fourth			Total
Year Ended December 31, 2017
Total revenues	$	31,781	$	28,492		$	27,054	$	28,386		$	115,713
Income before income taxes	2,083		4,386			1,880		2,294			10,643
Net income	$	1,352	$	2,849		$	1,218	$	734		$	6,153
Basic earnings per share (1)	$	0.05	$	0.11		$	0.05	$	0.03		$	0.24
Diluted earnings per share (1)	0.05		0.11			0.05		0.03			0.24
Year Ended December 31, 2016
Total revenues	$	34,351	$	34,907		$	33,869	$	37,458		$	140,585
Income (loss) before income taxes	609		(508		)	1,140		(71		)	1,170
Net income (loss)	$	407	$	(321	)	$	740	$	(40	)	$	786
Basic earnings per share (1)	$	0.02	$	(0.01	)	$	0.03	$	—		$	0.03
Diluted earnings per share (1)	0.02		(0.01		)	0.03		—			0.03

(1) The sum of the quarterly reported amounts may not equal the full year, as each is computed independently.

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EARNINGS PER COMMON SHARE (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Components of Basic and Diluted Earnings per Share

The components of basic and diluted earnings per share were as follows:

	Years Ended December 31,
	2017				2016				2015
(In Thousands Except Share and Per Share Data)	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income from continuing operations	$	44,870	$	44,870	$	49,118	$	49,118	$	85,320	$	85,320
Weighted-average common shares outstanding	25,103,720		25,103,720		25,335,706		25,335,706		25,047,405		25,047,405
Add dilutive effect of restricted stock awards	—		250,530		—		155,059		—		122,840
Add dilutive effect of stock options	—		286,354		—		313,913		—		65,751
Weighted-average common shares	25,103,720		25,640,604		25,335,706		25,804,678		25,047,405		25,235,996
Earnings per common share from continuing operations	$	1.79	$	1.75	$	1.94	$	1.90	$	3.41	$	3.38
Earnings per common share from discontinued operations	0.24		0.24		0.03		0.03		0.15		0.15
Earnings per common share	$	2.03	$	1.99	$	1.97	$	1.93	$	3.56	$	3.53
Awards excluded from diluted calculation(1)	—		—		—		—		—		343,390

(1) Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.

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LEASE COMMITMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Schedule of Future Minimum Rental Payments

At December 31, 2017, our future minimum rental payments were as follows:

2018	$	6,435
2019	6,027
2020	5,529
2021	3,173
2022	643
Thereafter	718
Total	$	22,525

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INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Major Classes of Intangible Assets

Our major classes of intangible assets are presented in the following table:

	Year Ended December 31,
	2017			2016
Agency relationships	$	10,338		$	10,338
Accumulated amortization - agency relationships	(5,566		)	(4,929		)
	$	4,772		$	5,409
Software	$	3,260		$	3,260
Accumulated amortization - software	(3,260		)	(3,260		)
	$	—		$	—
Trade names	$	1,978		$	1,978
Accumulated amortization - trade names	(890		)	(758		)
	$	1,088		$	1,220
Favorable contract	$	286		$	286
Accumulated amortization - favorable contract	(286		)	(286		)
	$	—		$	—
State insurance licenses (1)	$	3,020		$	3,020
Net intangible assets	$	8,880		$	9,649

(1) The intangible asset for licenses has an indefinite life and therefore is not amortized.

Schedule of Estimated Useful Lives of Amortizable Intangible Assets

The estimated useful lives assigned to our major classes of amortizable intangible assets are as follows:

	Useful Life
Agency relationships	Fifteen years
Software	Two years
Trade names	Fifteen years
Favorable contract	Two years

Schedule of Estimated Aggregate Amortization Expense

Our estimated aggregate amortization expense for each of the next five years is as follows:

2018	$	719
2019	709
2020	709
2021	709
2022	709

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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2017, 2016 and 2015:

				Liability for
	Net unrealized			underfunded
	appreciation			employee
	on investments			benefit costs			Total
Balance as of January 1, 2015	$	149,623		$	(58,450	)	$	91,173
Change in accumulated other comprehensive income before reclassifications	(18,321		)	5,664			(12,657		)
Reclassification adjustments from accumulated other comprehensive income	(2,933		)	4,854			1,921
Balance as of December 31, 2015	$	128,369		$	(47,932	)	$	80,437
Change in accumulated other comprehensive income before reclassifications	8,461			19,529			27,990
Reclassification adjustments from accumulated other comprehensive income	(2,938		)	3,566			628
Balance as of December 31, 2016	$	133,892		$	(24,837	)	$	109,055
Change in accumulated other comprehensive income before reclassifications	48,467			(19,878		)	28,589
Reclassification adjustments from accumulated other comprehensive income	(4,152		)	3,514			(638		)
Accumulated effect of change in enacted tax rate	36,658			(5,350		)	31,308
Balance as of December 31, 2017	$	214,865		$	(46,551	)	$	168,314

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DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

The major assets and liability categories were as follows as of the dates indicated:

Discontinued Operations
Balance Sheets
	December 31,
(In Thousands, Except Share Data)	2017		2016
Assets
Investments
Fixed maturities
Held-to-maturity, at amortized cost (fair value $34 in 2017 and $49 in 2016)	$	34	$	48
Available-for-sale, at fair value (amortized cost $1,412,291 in 2017 and $1,429,270 in 2016)	1,430,025		1,444,840
Equity Securities available-for-sale, at fair value (cost $5,099 in 2017 and $8,510 in 2016)	23,653		24,046
Mortgage loans	3,435		3,706
Policy loans	5,815		5,366
Other long-term investments	16,437		15,870
	1,479,399		1,493,876
Cash and cash equivalents	15,851		21,659
Deferred policy acquisition costs	71,151		70,750
Other assets	19,733		19,333
Total assets held for sale	$	1,586,134	$	1,605,618
Liabilities
Future policy benefits and losses	$	1,320,401	$	1,350,503
Deferred income taxes	18,716		27,739
Accrued expenses and other liabilities	8,018		11,981
Total liabilities held for sale	$	1,347,135	$	1,390,223

Summary operating results of discontinued operations were as follows for the periods indicated:

Discontinued Operations
Statements of Income
	For the Years Ended December 31,
(In Thousands, Except Share Data)	2017		2016		2015
Revenues
Net premiums earned	$	61,368	$	87,270	$	79,195
Investment income, net of investment expenses	49,720		51,538		54,222
Net realized investment gains (losses)
Other-than-temporary impairment charges	—		—		(1,300		)
Net realized investment gains	4,008		1,156		3,022
Total net realized investment gains	4,008		1,156		1,722
Other income	617		621		508
Total revenues	$	115,713	$	140,585	$	135,647
Benefits, Losses and Expenses
Losses and loss settlement expenses	$	40,451	$	31,365	$	29,001
Increase in liability for future policy benefits	27,632		59,969		50,945
Amortization of deferred policy acquisition costs	5,181		8,121		6,634
Other underwriting expenses	13,281		19,881		19,306
Interest on policyholders’ accounts	18,525		20,079		23,680
Total benefits, losses and expenses	$	105,070	$	139,415	$	129,566
Income from discontinued operations before income taxes	$	10,643	$	1,170	$	6,081
Federal income tax expense	4,490		384		2,275
Net income from discontinued operations	$	6,153	$	786	$	3,806
Earnings per common share from discontinued operations:
Basic	$	0.24	$	0.03	$	0.15
Diluted	0.24		0.03		0.15

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details)	3 Months Ended		9 Months Ended	12 Months Ended
	Dec. 31, 2017 USD ($) segment state	Dec. 31, 2017 USD ($) state	Sep. 17, 2017 segment	Dec. 31, 2017 USD ($) state plan	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) holding_company
Item Effected [Line Items]
Number of operating segments | segment	1		2
Percentage of the gains and profits from the Lloyds plan available to United Fire & Indemnity Company				100.00%
Number of holding companies dissolved | holding_company						3
Securities on deposit as required by law	$ 1,492,928,000	$ 1,492,928,000		$ 1,492,928,000	$ 1,509,339,000
Payment for income taxes				7,667,000	24,034,000	$ 39,497,000
Federal tax refund received				13,383,000	0	919,000
Interest payment				0	0	0
Increase (decrease) in DAC asset	(6,294,000)	(6,294,000)		(6,294,000)	(6,413,000)	(2,003,000)
Depreciation expense				3,805,000	5,266,000	5,704,000
Goodwill, impairment charge				0	0	0
Unrecognized tax benefit	0	0		$ 0	0	0
Number of equity compensation plans | plan				2
Excess tax benefit		149,000		$ 695,000
Accumulated effect of change in enacted tax rate				31,308,000
Accumulated other comprehensive income, net of tax	168,314,000	168,314,000		168,314,000	109,055,000
Retained earnings	608,700,000	608,700,000		608,700,000	616,322,000
Future minimum lease payments	$ 22,525,000	$ 22,525,000		$ 22,525,000
Future minimum lease payments as a percentage of total assets (less than)	1.00%	1.00%		1.00%
Minimum
Item Effected [Line Items]
Useful life				2 years
Maximum
Item Effected [Line Items]
Useful life				15 years
Continuing Operations - Property and Casualty Insurance
Item Effected [Line Items]
Number of states in which we are licensed as insurer | state	46	46		46
Amortization expense				$ 769,000	769,000	769,000
Discontinued Operations - Life Insurance
Item Effected [Line Items]
Number of states in which we are licensed as insurer | state	37	37		37
Discontinued Operations - Life Insurance | Minimum
Item Effected [Line Items]
Liability for future policy benefits, interest rate	3.15%	3.15%		3.15%
Discontinued Operations - Life Insurance | Maximum
Item Effected [Line Items]
Liability for future policy benefits, interest rate	6.00%	6.00%		6.00%
Accounting Standards Update 2016-01 [Member] | Pro Forma
Item Effected [Line Items]
Accumulated other comprehensive income, net of tax	$ (242,100,000)	$ (242,100,000)		$ (242,100,000)
Retained earnings	$ 242,100,000	$ 242,100,000		242,100,000
Accumulated other comprehensive income, net of tax
Item Effected [Line Items]
Accumulated effect of change in enacted tax rate				31,308,000	0	0
Retained earnings
Item Effected [Line Items]
Accumulated effect of change in enacted tax rate				$ (31,308,000)	$ 0	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Deferred Policy Acquisition Costs) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Recorded asset at beginning of year	$ 93,362
Recorded asset at end of year	88,102	$ 93,362
Continuing and Discontinuing Operations
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Recorded asset at beginning of year	164,112	168,264	$ 139,719
Underwriting costs deferred	207,949	211,271	203,982
Amortization of deferred policy acquisition costs	(212,927)	(211,013)	(186,817)
Ending unamortized deferred policy acquisition costs	159,134	168,522	156,884
Change in shadow deferred policy acquisition costs	119	(4,410)	11,380
Recorded asset at end of year	159,253	164,112	168,264
Continuing Operations - Property and Casualty Insurance
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Recorded asset at beginning of year	93,362	90,547	72,861
Underwriting costs deferred	202,486	205,707	197,869
Amortization of deferred policy acquisition costs	(207,746)	(202,892)	(180,183)
Recorded asset at end of year	88,102	93,362	90,547
Discontinued Operations - Life Insurance | Discontinued Operations
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Recorded asset at beginning of year	70,750	77,717	66,858
Underwriting costs deferred	5,463	5,564	6,113
Amortization of deferred policy acquisition costs	(5,181)	(8,121)	(6,634)
Ending unamortized deferred policy acquisition costs	71,032	75,160	66,337
Change in shadow deferred policy acquisition costs	119	(4,410)	11,380
Recorded asset at end of year	$ 71,151	$ 70,750	$ 77,717

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property and Equipment) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 68,992	$ 55,524
Land
Property, Plant and Equipment [Line Items]
Total property and equipment	8,396	8,231
Buildings
Property, Plant and Equipment [Line Items]
Total property and equipment	48,677	41,119
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	4,645	4,711
Computer equipment and software
Property, Plant and Equipment [Line Items]
Total property and equipment	7,274	1,463
Airplane
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 0	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Useful Life) (Details)	12 Months Ended
	Dec. 31, 2017
Computer equipment and software
Property, Plant and Equipment [Line Items]
Useful Life	3 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Useful Life	7 years
Real estate | Minimum
Property, Plant and Equipment [Line Items]
Useful Life	7 years
Real estate | Maximum
Property, Plant and Equipment [Line Items]
Useful Life	39 years
Airplane
Property, Plant and Equipment [Line Items]
Useful Life	5 years

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SUMMARY OF INVESTMENTS (Fair Value of Investments) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
HELD-TO-MATURITY
Amortized Cost	$ 150	$ 150
Fair Value	150	150
Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	2,991,387	2,956,009
Gross Unrealized Appreciation	295,163	247,298
Gross Unrealized Depreciation	16,889	34,765
Fair Value	3,269,661	3,168,542
U.S. Treasury | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	17,073	23,216
Gross Unrealized Appreciation	4	87
Gross Unrealized Depreciation	186	108
Fair Value	16,891	23,195
U.S. government agency | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	121,574	76,692
Gross Unrealized Appreciation	1,311	1,445
Gross Unrealized Depreciation	717	540
Fair Value	122,168	77,597
Fixed maturities
HELD-TO-MATURITY
Amortized Cost	150	150
Gross Unrealized Appreciation	0	0
Gross Unrealized Depreciation	0	0
Fair Value	150	150
AVAILABLE-FOR-SALE
Amortized Cost	1,516,610	1,458,235
Gross Unrealized Appreciation	27,412	18,725
Gross Unrealized Depreciation	8,952	23,674
Fair Value	1,535,070	1,453,286
Fixed maturities | Discontinued Operations
HELD-TO-MATURITY
Amortized Cost	34	48
Gross Unrealized Appreciation	0	1
Gross Unrealized Depreciation	0	0
Fair Value	34	49
AVAILABLE-FOR-SALE
Amortized Cost	1,412,291	1,429,270
Gross Unrealized Appreciation	25,055	26,115
Gross Unrealized Depreciation	7,321	10,545
Fair Value	1,430,025	1,444,840
Fixed maturities | Continuing and Discontinuing Operations
HELD-TO-MATURITY
Amortized Cost	184	198
Gross Unrealized Appreciation	0	1
Gross Unrealized Depreciation	0	0
Fair Value	184	199
AVAILABLE-FOR-SALE
Amortized Cost	2,928,901	2,887,505
Gross Unrealized Appreciation	52,467	44,840
Gross Unrealized Depreciation	16,273	34,219
Fair Value	2,965,095	2,898,126
General obligations | Midwest | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	107,689	143,747
Gross Unrealized Appreciation	2,446	1,808
Gross Unrealized Depreciation	439	1,412
Fair Value	109,696	144,143
General obligations | Northeast | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	47,477	57,731
Gross Unrealized Appreciation	1,174	909
Gross Unrealized Depreciation	10	231
Fair Value	48,641	58,409
General obligations | South | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	139,870	129,475
Gross Unrealized Appreciation	2,462	1,249
Gross Unrealized Depreciation	813	2,355
Fair Value	141,519	128,369
General obligations | West | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	111,123	114,524
Gross Unrealized Appreciation	2,351	1,380
Gross Unrealized Depreciation	463	2,173
Fair Value	113,011	113,731
Special revenue | Midwest | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	155,475	167,430
Gross Unrealized Appreciation	3,620	2,313
Gross Unrealized Depreciation	351	1,433
Fair Value	158,744	168,310
Special revenue | Northeast | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	79,028	70,202
Gross Unrealized Appreciation	1,351	487
Gross Unrealized Depreciation	619	2,624
Fair Value	79,760	68,065
Special revenue | South | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	260,145	244,225
Gross Unrealized Appreciation	5,218	1,753
Gross Unrealized Depreciation	1,851	6,791
Fair Value	263,512	239,187
Special revenue | West | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	156,576	134,287
Gross Unrealized Appreciation	2,929	1,509
Gross Unrealized Depreciation	1,198	4,052
Fair Value	158,307	131,744
Foreign bonds | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	51,361	62,995
Gross Unrealized Appreciation	1,441	2,239
Gross Unrealized Depreciation	49	0
Fair Value	52,753	65,234
Public utilities | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	206,028	212,360
Gross Unrealized Appreciation	3,386	3,761
Gross Unrealized Depreciation	270	447
Fair Value	209,144	215,674
Corporate bonds | Energy | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	93,191	107,084
Gross Unrealized Appreciation	1,972	2,195
Gross Unrealized Depreciation	110	419
Fair Value	95,053	108,860
Corporate bonds | Industrials | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	218,067	225,526
Gross Unrealized Appreciation	3,881	5,359
Gross Unrealized Depreciation	241	982
Fair Value	221,707	229,903
Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	183,253	178,135
Gross Unrealized Appreciation	3,498	3,847
Gross Unrealized Depreciation	494	295
Fair Value	186,257	181,687
Corporate bonds | Health care | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	74,125	81,211
Gross Unrealized Appreciation	1,312	2,063
Gross Unrealized Depreciation	29	151
Fair Value	75,408	83,123
Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	146,853	143,402
Gross Unrealized Appreciation	2,376	2,029
Gross Unrealized Depreciation	250	819
Fair Value	148,979	144,612
Corporate bonds | Financial services | Continuing and Discontinuing Operations
HELD-TO-MATURITY
Amortized Cost	150	150
Gross Unrealized Appreciation	0	0
Gross Unrealized Depreciation	0	0
Fair Value	150	150
AVAILABLE-FOR-SALE
Amortized Cost	277,824	269,981
Gross Unrealized Appreciation	5,769	5,328
Gross Unrealized Depreciation	442	1,358
Fair Value	283,151	273,951
Mortgage-backed securities | Continuing and Discontinuing Operations
HELD-TO-MATURITY
Amortized Cost	34	48
Gross Unrealized Appreciation	0	1
Gross Unrealized Depreciation	0	0
Fair Value	34	49
AVAILABLE-FOR-SALE
Amortized Cost	13,828	17,288
Gross Unrealized Appreciation	101	201
Gross Unrealized Depreciation	238	241
Fair Value	13,691	17,248
Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	157,836	145,947
Gross Unrealized Appreciation	1,921	1,279
Gross Unrealized Depreciation	2,274	2,766
Fair Value	157,483	144,460
Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	201,320	176,226
Gross Unrealized Appreciation	1,879	1,638
Gross Unrealized Depreciation	4,047	3,406
Fair Value	199,152	174,458
Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	104,903	101,414
Gross Unrealized Appreciation	1,703	1,816
Gross Unrealized Depreciation	1,174	1,334
Fair Value	105,432	101,896
Asset-backed securities | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	4,282	4,407
Gross Unrealized Appreciation	362	145
Gross Unrealized Depreciation	8	282
Fair Value	4,636	4,270
Equity securities
AVAILABLE-FOR-SALE
Amortized Cost	57,387	59,994
Gross Unrealized Appreciation	224,065	186,692
Gross Unrealized Depreciation	539	316
Fair Value	280,913	246,370
Equity securities | Discontinued Operations
AVAILABLE-FOR-SALE
Amortized Cost	5,099	8,510
Gross Unrealized Appreciation	18,631	15,766
Gross Unrealized Depreciation	77	230
Fair Value	23,653	24,046
Equity securities | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	62,486	68,504
Gross Unrealized Appreciation	242,696	202,458
Gross Unrealized Depreciation	616	546
Fair Value	304,566	270,416
Common stock | Public utilities | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	6,394	6,394
Gross Unrealized Appreciation	16,075	13,465
Gross Unrealized Depreciation	30	188
Fair Value	22,439	19,671
Common stock | Energy | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	6,514	6,514
Gross Unrealized Appreciation	8,171	8,555
Gross Unrealized Depreciation	120	22
Fair Value	14,565	15,047
Common stock | Industrials | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	13,117	13,252
Gross Unrealized Appreciation	53,522	38,715
Gross Unrealized Depreciation	120	173
Fair Value	66,519	51,794
Common stock | Consumer goods and services | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	10,110	10,324
Gross Unrealized Appreciation	15,742	13,851
Gross Unrealized Depreciation	164	58
Fair Value	25,688	24,117
Common stock | Health care | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	7,763	7,763
Gross Unrealized Appreciation	32,340	19,657
Gross Unrealized Depreciation	0	0
Fair Value	40,103	27,420
Common stock | Technology, media and telecommunications | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	6,067	5,931
Gross Unrealized Appreciation	11,556	9,476
Gross Unrealized Depreciation	115	38
Fair Value	17,508	15,369
Common stock | Financial services | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	11,529	17,289
Gross Unrealized Appreciation	104,985	98,728
Gross Unrealized Depreciation	67	67
Fair Value	116,447	115,950
Nonredeemable preferred stocks | Continuing and Discontinuing Operations
AVAILABLE-FOR-SALE
Amortized Cost	992	1,037
Gross Unrealized Appreciation	305	11
Gross Unrealized Depreciation	0	0
Fair Value	$ 1,297	$ 1,048

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SUMMARY OF INVESTMENTS (Maturities) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Held-To-Maturity, Amortized Cost
Due in one year or less	$ 0
Due after one year through five years	150
Due after five years through 10 years	0
Due after 10 years	0
Amortized Cost	150	$ 150
Held-To-Maturity, Fair Value
Due in one year or less	0
Due after one year through five years	150
Due after five years through 10 years	0
Due after 10 years	0
Fair Value	150	150
Available-For-Sale, Amortized Cost
Due in one year or less	37,899
Due after one year through five years	204,494
Due after five years through 10 years	394,107
Due after 10 years	694,850
Available-For-Sale, Fair Value
Due in one year or less	38,144
Due after one year through five years	208,353
Due after five years through 10 years	402,799
Due after 10 years	700,879
Trading, Amortized Cost
Due in one year or less	2,225
Due after one year through five years	9,055
Due after five years through 10 years	1,302
Due after 10 years	2,000
Amortized Cost	14,582	13,054
Trading, Fair Value
Due in one year or less	2,835
Due after one year through five years	10,547
Due after five years through 10 years	1,156
Due after 10 years	2,304
Fair Value	16,842	14,390
Continuing and Discontinuing Operations
Held-To-Maturity, Amortized Cost
Due in one year or less	0
Due after one year through five years	150
Due after five years through 10 years	0
Due after 10 years	0
Held-To-Maturity, Fair Value
Due in one year or less	0
Due after one year through five years	150
Due after five years through 10 years	0
Due after 10 years	0
Available-For-Sale, Amortized Cost
Due in one year or less	97,450
Due after one year through five years	749,372
Due after five years through 10 years	823,257
Due after 10 years	776,653
Amortized Cost	2,991,387	2,956,009
Available-For-Sale, Fair Value
Due in one year or less	97,994
Due after one year through five years	763,260
Due after five years through 10 years	839,360
Due after 10 years	784,087
Fair Value	3,269,661	3,168,542
Trading, Amortized Cost
Due in one year or less	2,225
Due after one year through five years	9,055
Due after five years through 10 years	1,302
Due after 10 years	2,000
Trading, Fair Value
Due in one year or less	2,835
Due after one year through five years	10,547
Due after five years through 10 years	1,156
Due after 10 years	2,304
Discontinued Operations
Held-To-Maturity, Amortized Cost
Due in one year or less	0
Due after one year through five years	0
Due after five years through 10 years	0
Due after 10 years	0
Held-To-Maturity, Fair Value
Due in one year or less	0
Due after one year through five years	0
Due after five years through 10 years	0
Due after 10 years	0
Available-For-Sale, Amortized Cost
Due in one year or less	59,551
Due after one year through five years	544,878
Due after five years through 10 years	429,150
Due after 10 years	81,803
Available-For-Sale, Fair Value
Due in one year or less	59,850
Due after one year through five years	554,907
Due after five years through 10 years	436,561
Due after 10 years	83,208
Trading, Amortized Cost
Due in one year or less	0
Due after one year through five years	0
Due after five years through 10 years	0
Due after 10 years	0
Trading, Fair Value
Due in one year or less	0
Due after one year through five years	0
Due after five years through 10 years	0
Due after 10 years	0
Fixed maturities
Held-To-Maturity, Amortized Cost
Amortized Cost	150	150
Held-To-Maturity, Fair Value
Fair Value	150	150
Available-For-Sale, Amortized Cost
Amortized Cost	1,516,610	1,458,235
Available-For-Sale, Fair Value
Fair Value	1,535,070	1,453,286
Trading, Amortized Cost
Amortized Cost	14,582
Trading, Fair Value
Fair Value	16,842
Fixed maturities | Continuing and Discontinuing Operations
Held-To-Maturity, Amortized Cost
Amortized Cost	184	198
Held-To-Maturity, Fair Value
Fair Value	184	199
Available-For-Sale, Amortized Cost
Amortized Cost	2,928,901	2,887,505
Available-For-Sale, Fair Value
Fair Value	2,965,095	2,898,126
Trading, Amortized Cost
Amortized Cost	14,582
Trading, Fair Value
Fair Value	16,842
Fixed maturities | Discontinued Operations
Held-To-Maturity, Amortized Cost
Amortized Cost	34	48
Held-To-Maturity, Fair Value
Fair Value	34	49
Available-For-Sale, Amortized Cost
Amortized Cost	1,412,291	1,429,270
Available-For-Sale, Fair Value
Fair Value	1,430,025	1,444,840
Trading, Amortized Cost
Amortized Cost	0
Trading, Fair Value
Fair Value	0
Asset-backed securities
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	3,175
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	3,535
Asset-backed securities | Continuing and Discontinuing Operations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	4,282
Amortized Cost	4,282	4,407
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	4,636
Fair Value	4,636	4,270
Asset-backed securities | Discontinued Operations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	1,107
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	1,101
Mortgage-backed securities
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	9,205
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	9,231
Mortgage-backed securities | Continuing and Discontinuing Operations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	34
Amortized Cost	34	48
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	34
Fair Value	34	49
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	13,828
Amortized Cost	13,828	17,288
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	13,691
Fair Value	13,691	$ 17,248
Mortgage-backed securities | Discontinued Operations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	34
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	34
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	4,623
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	4,460
Collateralized mortgage obligations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	172,880
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	172,129
Collateralized mortgage obligations | Continuing and Discontinuing Operations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	464,059
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	462,067
Collateralized mortgage obligations | Discontinued Operations
Held-To-Maturity, Amortized Cost
Securities not categorized by contractual maturity	0
Held-To-Maturity, Fair Value
Securities not categorized by contractual maturity	0
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	291,179
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	$ 289,938

XML

SUMMARY OF INVESTMENTS (Net Realized Investment Gains and Losses) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	$ 4,055	$ 4,947	$ 1,124
AVAILABLE-FOR-SALE
Proceeds from sales	7,404	1,968	478
Gross realized gains	1,046	920	451
Gross realized losses	(20)	0	0
Discontinued Operations
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	4,008	1,156	1,722
AVAILABLE-FOR-SALE
Proceeds from sales	7,315	12,354	11,066
Gross realized gains	1,264	65	683
Gross realized losses	(78)	(639)	0
Continuing and Discontinuing Operations
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	8,063	6,103	2,846
Fixed maturities | Available-for-sale
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	829	1,004	814
Fixed maturities | Change in fair value
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	924	189	(1,352)
Fixed maturities | Sales
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	244	931	1,381
Fixed maturities | Other-than-temporary-impairment charges
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	0	0	0
Equity securities | Available-for-sale
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	1,553	2,359	1,977
Equity securities | Change in fair value
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	332	301	(448)
Equity securities | Sales
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	57	(6)	66
Other long-term investments
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	0	0	(1,314)
Cash equivalents
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	0	169	0
Real Estate
Gain (Loss) on Investments [Line Items]
Net realized investment gains (losses) from continuing operations	$ 116	$ 0	$ 0

XML

SUMMARY OF INVESTMENTS (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Sale of held-to-maturity securities	$ 0	$ 0	$ 0
Trading securities	23,273,000	20,034,000
Remaining potential off-balance sheet contractual obligation (up to)	2,175,000
Fixed maturities
Other-than-temporary impairment charges	0	0	1,300,000
Equity securities
Other-than-temporary impairment charges	0	0	0
Equity securities | Maximum
Largest unrealized loss greater than 12 months on an individual security	$ 158,000	$ 188,000	$ 225,000

XML

SUMMARY OF INVESTMENTS (Net Investment Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Other	$ 300	$ 422	$ 433
Total investment income from continuing operations	57,495	61,794	52,463
Less investment expenses	6,305	6,510	5,904
Net investment income from continuing operations	51,190	55,284	46,559
Discontinued Operations
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Net investment income from continuing operations	49,720	51,538	54,222
Continuing and Discontinuing Operations
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Net investment income from continuing operations	100,910	106,822	100,781
Fixed Maturities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Interest income	44,784	43,147	41,859
Equity securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Dividends on equity securities	7,108	6,448	6,421
Other long-term investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Interest income	6,870	1,200	1,200
Other long-term investments | Change in Value
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Other	(2,812)	10,178	2,313
Short-term investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Interest income	120	47	3
Cash and cash equivalents
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Interest income	$ 1,125	$ 352	$ 234

XML

SUMMARY OF INVESTMENTS (Unrealized Appreciation) (Details) - Continuing and Discontinuing Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$ 25,573	$ (21,271)	$ (37,621)
Available-for-sale equity securities	40,168	34,179	(6,459)
Deferred policy acquisition costs	119	(4,410)	11,380
Income tax effect	(21,545)	(2,975)	11,446
Accumulated effect of change in enacted tax rate	36,658	0	0
Total change in net unrealized investment appreciation, net of tax	$ 80,973	$ 5,523	$ (21,254)

XML

SUMMARY OF INVESTMENTS (Investments in Unrealized Loss Position) (Details) $ in Thousands	Dec. 31, 2017 USD ($) issue	Dec. 31, 2016 USD ($) issue
Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	169	567
12 months or longer | issue	183	55
Fair Value
Less than 12 months	$ 414,666	$ 1,060,938
12 months or longer	471,075	53,798
Total	885,741	1,114,736
Gross Unrealized Depreciation
Less than 12 months	3,489	32,167
12 months or longer	13,400	2,598
Total	$ 16,889	$ 34,765
U.S. Treasury | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	5	9
12 months or longer | issue	2	0
Fair Value
Less than 12 months	$ 10,370	$ 10,800
12 months or longer	5,765	0
Total	16,135	10,800
Gross Unrealized Depreciation
Less than 12 months	67	108
12 months or longer	119	0
Total	$ 186	$ 108
U.S. government agency | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	11	10
12 months or longer | issue	5	0
Fair Value
Less than 12 months	$ 64,842	$ 36,593
12 months or longer	19,372	0
Total	84,214	36,593
Gross Unrealized Depreciation
Less than 12 months	390	540
12 months or longer	327	0
Total	$ 717	$ 540
Fixed maturities
Number of Issues
Less than 12 months | issue	88	404
12 months or longer | issue	112	12
Fair Value
Less than 12 months	$ 232,489	$ 654,235
12 months or longer	302,815	6,288
Total	535,304	660,523
Gross Unrealized Depreciation
Less than 12 months	1,791	23,359
12 months or longer	7,161	315
Total	$ 8,952	$ 23,674
Fixed maturities | Discontinued Operations
Number of Issues
Less than 12 months | issue	74	150
12 months or longer | issue	61	21
Fair Value
Less than 12 months	$ 180,891	$ 406,342
12 months or longer	167,625	46,790
Total	348,516	453,132
Gross Unrealized Depreciation
Less than 12 months	1,415	8,745
12 months or longer	5,906	1,800
Total	$ 7,321	$ 10,545
Fixed maturities | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	162	554
12 months or longer | issue	173	33
Fair Value
Less than 12 months	$ 413,380	$ 1,060,577
12 months or longer	470,440	53,078
Total	883,820	1,113,655
Gross Unrealized Depreciation
Less than 12 months	3,206	32,104
12 months or longer	13,067	2,115
Total	$ 16,273	$ 34,219
General obligations | Midwest | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	2	27
12 months or longer | issue	3	0
Fair Value
Less than 12 months	$ 2,177	$ 40,545
12 months or longer	19,729	0
Total	21,906	40,545
Gross Unrealized Depreciation
Less than 12 months	8	1,412
12 months or longer	431	0
Total	$ 439	$ 1,412
General obligations | Northeast | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	0	9
12 months or longer | issue	1	0
Fair Value
Less than 12 months	$ 0	$ 9,874
12 months or longer	3,644	0
Total	3,644	9,874
Gross Unrealized Depreciation
Less than 12 months	0	231
12 months or longer	10	0
Total	$ 10	$ 231
General obligations | South | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	3	37
12 months or longer | issue	11	0
Fair Value
Less than 12 months	$ 7,959	$ 53,699
12 months or longer	29,545	0
Total	37,504	53,699
Gross Unrealized Depreciation
Less than 12 months	32	2,355
12 months or longer	781	0
Total	$ 813	$ 2,355
General obligations | West | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	2	30
12 months or longer | issue	8	0
Fair Value
Less than 12 months	$ 5,944	$ 55,265
12 months or longer	25,755	0
Total	31,699	55,265
Gross Unrealized Depreciation
Less than 12 months	18	2,173
12 months or longer	445	0
Total	$ 463	$ 2,173
Special revenue | Midwest | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	2	41
12 months or longer | issue	7	0
Fair Value
Less than 12 months	$ 3,486	$ 62,937
12 months or longer	19,130	0
Total	22,616	62,937
Gross Unrealized Depreciation
Less than 12 months	15	1,433
12 months or longer	336	0
Total	$ 351	$ 1,433
Special revenue | Northeast | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	1	22
12 months or longer | issue	11	0
Fair Value
Less than 12 months	$ 4,471	$ 54,993
12 months or longer	28,476	0
Total	32,947	54,993
Gross Unrealized Depreciation
Less than 12 months	37	2,624
12 months or longer	582	0
Total	$ 619	$ 2,624
Special revenue | South | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	8	79
12 months or longer | issue	27	0
Fair Value
Less than 12 months	$ 7,749	$ 152,979
12 months or longer	69,917	0
Total	77,666	152,979
Gross Unrealized Depreciation
Less than 12 months	107	6,791
12 months or longer	1,744	0
Total	$ 1,851	$ 6,791
Special revenue | West | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	3	44
12 months or longer | issue	22	0
Fair Value
Less than 12 months	$ 5,424	$ 81,676
12 months or longer	56,753	0
Total	62,177	81,676
Gross Unrealized Depreciation
Less than 12 months	16	4,052
12 months or longer	1,182	0
Total	$ 1,198	$ 4,052
Foreign bonds | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	1
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 857
12 months or longer	0
Total	857
Gross Unrealized Depreciation
Less than 12 months	49
12 months or longer	0
Total	$ 49
Public utilities | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	8	20
12 months or longer | issue	5	2
Fair Value
Less than 12 months	$ 19,186	$ 38,511
12 months or longer	8,446	2,122
Total	27,632	40,633
Gross Unrealized Depreciation
Less than 12 months	79	423
12 months or longer	191	24
Total	$ 270	$ 447
Corporate bonds | Financial services | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	22	37
12 months or longer | issue	4	0
Fair Value
Less than 12 months	$ 50,144	$ 75,286
12 months or longer	11,389	0
Total	61,533	75,286
Gross Unrealized Depreciation
Less than 12 months	256	1,358
12 months or longer	186	0
Total	$ 442	$ 1,358
Corporate bonds | Energy | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	1	8
12 months or longer | issue	1	3
Fair Value
Less than 12 months	$ 2,236	$ 15,938
12 months or longer	1,606	8,232
Total	3,842	24,170
Gross Unrealized Depreciation
Less than 12 months	13	313
12 months or longer	97	106
Total	$ 110	$ 419
Corporate bonds | Industrials | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	10	24
12 months or longer | issue	2	3
Fair Value
Less than 12 months	$ 27,773	$ 42,854
12 months or longer	4,275	5,641
Total	32,048	48,495
Gross Unrealized Depreciation
Less than 12 months	146	596
12 months or longer	95	386
Total	$ 241	$ 982
Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	14	11
12 months or longer | issue	3	0
Fair Value
Less than 12 months	$ 32,781	$ 21,059
12 months or longer	6,813	0
Total	39,594	21,059
Gross Unrealized Depreciation
Less than 12 months	248	295
12 months or longer	246	0
Total	$ 494	$ 295
Corporate bonds | Health care | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	4	9
12 months or longer | issue	0	0
Fair Value
Less than 12 months	$ 9,947	$ 20,918
12 months or longer	0	0
Total	9,947	20,918
Gross Unrealized Depreciation
Less than 12 months	29	151
12 months or longer	0	0
Total	$ 29	$ 151
Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	12	16
12 months or longer | issue	3	3
Fair Value
Less than 12 months	$ 35,319	$ 41,230
12 months or longer	10,413	10,241
Total	45,732	51,471
Gross Unrealized Depreciation
Less than 12 months	122	516
12 months or longer	128	303
Total	$ 250	$ 819
Mortgage-backed securities | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	10	16
12 months or longer | issue	10	5
Fair Value
Less than 12 months	$ 2,458	$ 9,611
12 months or longer	6,641	1,198
Total	9,099	10,809
Gross Unrealized Depreciation
Less than 12 months	18	187
12 months or longer	220	54
Total	$ 238	$ 241
Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	20	36
12 months or longer | issue	17	9
Fair Value
Less than 12 months	$ 49,764	$ 82,430
12 months or longer	46,969	13,603
Total	96,733	96,033
Gross Unrealized Depreciation
Less than 12 months	629	2,261
12 months or longer	1,645	505
Total	$ 2,274	$ 2,766
Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	11	41
12 months or longer | issue	20	3
Fair Value
Less than 12 months	$ 37,543	$ 105,775
12 months or longer	75,679	5,141
Total	113,222	110,916
Gross Unrealized Depreciation
Less than 12 months	577	3,165
12 months or longer	3,470	241
Total	$ 4,047	$ 3,406
Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	11	27
12 months or longer | issue	11	4
Fair Value
Less than 12 months	$ 31,958	$ 46,633
12 months or longer	20,123	4,341
Total	52,081	50,974
Gross Unrealized Depreciation
Less than 12 months	342	1,091
12 months or longer	832	243
Total	$ 1,174	$ 1,334
Asset-backed securities | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	1	1
12 months or longer | issue	0	1
Fair Value
Less than 12 months	$ 992	$ 971
12 months or longer	0	2,559
Total	992	3,530
Gross Unrealized Depreciation
Less than 12 months	8	29
12 months or longer	0	253
Total	$ 8	$ 282
Equity securities
Number of Issues
Less than 12 months | issue	5	12
12 months or longer | issue	6	17
Fair Value
Less than 12 months	$ 1,129	$ 351
12 months or longer	385	477
Total	1,514	828
Gross Unrealized Depreciation
Less than 12 months	236	62
12 months or longer	303	254
Total	$ 539	$ 316
Equity securities | Discontinued Operations
Number of Issues
Less than 12 months | issue	2	1
12 months or longer | issue	4	5
Fair Value
Less than 12 months	$ 157	$ 10
12 months or longer	250	243
Total	407	253
Gross Unrealized Depreciation
Less than 12 months	47	1
12 months or longer	30	229
Total	$ 77	$ 230
Equity securities | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	7	13
12 months or longer | issue	10	22
Fair Value
Less than 12 months	$ 1,286	$ 361
12 months or longer	635	720
Total	1,921	1,081
Gross Unrealized Depreciation
Less than 12 months	283	63
12 months or longer	333	483
Total	$ 616	$ 546
Common stock | Financial services | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	2	3
12 months or longer | issue	1	2
Fair Value
Less than 12 months	$ 193	$ 53
12 months or longer	9	150
Total	202	203
Gross Unrealized Depreciation
Less than 12 months	55	3
12 months or longer	12	64
Total	$ 67	$ 67
Common stock | Public utilities | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	0	0
12 months or longer | issue	1	3
Fair Value
Less than 12 months	$ 0	$ 0
12 months or longer	278	120
Total	278	120
Gross Unrealized Depreciation
Less than 12 months	0	0
12 months or longer	30	188
Total	$ 30	$ 188
Common stock | Energy | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	2	0
12 months or longer | issue	0	1
Fair Value
Less than 12 months	$ 528	$ 0
12 months or longer	0	163
Total	528	163
Gross Unrealized Depreciation
Less than 12 months	120	0
12 months or longer	0	22
Total	$ 120	$ 22
Common stock | Industrials | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	1	0
12 months or longer | issue	5	6
Fair Value
Less than 12 months	$ 99	$ 0
12 months or longer	193	239
Total	292	239
Gross Unrealized Depreciation
Less than 12 months	13	0
12 months or longer	107	173
Total	$ 120	$ 173
Common stock | Consumer goods and services | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	0	3
12 months or longer | issue	2	2
Fair Value
Less than 12 months	$ 0	$ 282
12 months or longer	151	15
Total	151	297
Gross Unrealized Depreciation
Less than 12 months	0	55
12 months or longer	164	3
Total	$ 164	$ 58
Common stock | Technology, media and telecommunications | Continuing and Discontinuing Operations
Number of Issues
Less than 12 months | issue	2	7
12 months or longer | issue	1	8
Fair Value
Less than 12 months	$ 466	$ 26
12 months or longer	4	33
Total	470	59
Gross Unrealized Depreciation
Less than 12 months	95	5
12 months or longer	20	33
Total	$ 115	$ 38

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Other Assets | Rabbi Trust | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Corporate-owned life insurance	$ 4,029

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Carrying Value and Estimated Fair Value) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Investments
Held-to-maturity securities	$ 150	$ 150
Trading securities	23,273	20,034
Fair Value
Investments
Other long-term investments	49,352	51,769
Short-term investments	175	175
Cash and cash equivalents	95,562	89,194
Corporate-owned life insurance	4,029	2,592
Fair Value | Fixed Maturities
Investments
Held-to-maturity securities	150	150
Available-for-sale securities	1,535,070	1,453,286
Trading securities	16,842	14,390
Fair Value | Equity securities
Investments
Available-for-sale securities	280,913	246,370
Trading securities	6,431	5,644
Carrying Value
Investments
Other long-term investments	49,352	51,769
Short-term investments	175	175
Cash and cash equivalents	95,562	89,194
Corporate-owned life insurance	4,029	2,592
Carrying Value | Fixed Maturities
Investments
Held-to-maturity securities	150	150
Available-for-sale securities	1,535,070	1,453,286
Trading securities	16,842	14,390
Carrying Value | Equity securities
Investments
Available-for-sale securities	280,913	246,370
Trading securities	6,431	5,644
Discontinued Operations | Fair Value
Investments
Mortgage loans	3,594	3,895
Policy loans	5,815	5,366
Other long-term investments	16,437	15,870
Cash and cash equivalents	15,851	21,659
Policy reserves
Annuity (accumulations)	591,702	646,764
Annuity (benefit payments)	147,038	144,283
Discontinued Operations | Fair Value | Fixed Maturities
Investments
Held-to-maturity securities	34	49
Available-for-sale securities	1,430,025	1,444,840
Discontinued Operations | Fair Value | Equity securities
Investments
Available-for-sale securities	23,653	24,046
Discontinued Operations | Carrying Value
Investments
Mortgage loans	3,435	3,706
Policy loans	5,815	5,366
Other long-term investments	16,437	15,870
Cash and cash equivalents	15,851	21,659
Policy reserves
Annuity (accumulations)	611,866	666,711
Annuity (benefit payments)	93,560	95,129
Discontinued Operations | Carrying Value | Fixed Maturities
Investments
Held-to-maturity securities	34	48
Available-for-sale securities	1,430,025	1,444,840
Discontinued Operations | Carrying Value | Equity securities
Investments
Available-for-sale securities	$ 23,653	$ 24,046

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Financial Instruments Measured at Fair Value) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	$ 23,273	$ 20,034
Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	3,269,661	3,168,542
Corporate-Owned Life Insurance
U.S. Treasury | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	16,891	23,195
U.S. government agency | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	122,168	77,597
Foreign bonds | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	52,753	65,234
Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	209,144	215,674
Corporate bonds | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	95,053	108,860
Corporate bonds | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	221,707	229,903
Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	186,257	181,687
Corporate bonds | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	75,408	83,123
Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	148,979	144,612
Corporate bonds | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	283,151	273,951
Mortgage-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	13,691	17,248
Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	157,483	144,460
Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	199,152	174,458
Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	105,432	101,896
Asset-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	4,636	4,270
Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,535,070	1,453,286
Fixed maturities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,430,025	1,444,840
Fixed maturities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2,965,095	2,898,126
Common stocks | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	22,439	19,671
Common stocks | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	14,565	15,047
Common stocks | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	66,519	51,794
Common stocks | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	25,688	24,117
Common stocks | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	40,103	27,420
Common stocks | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	17,508	15,369
Common stocks | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	116,447	115,950
Nonredeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,297	1,048
Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	280,913	246,370
Equity securities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	23,653	24,046
Equity securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	304,566	270,416
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	175	175
Money Market Accounts	6,147	4,810
Corporate-Owned Life Insurance	4,029	2,592
Recurring | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	0	0
Money Market Accounts	10,677	11,992
Corporate-Owned Life Insurance	0	0
Recurring | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	3,269,661	3,168,542
Trading Securities	23,273	20,034
Short-Term Investments	175	175
Money Market Accounts	16,824	16,802
Corporate-Owned Life Insurance	4,029	2,592
Total Assets Measured at Fair Value	3,313,962	3,208,145
Recurring | U.S. Treasury | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	16,891	23,195
Recurring | U.S. government agency | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	122,168	77,597
Recurring | States, municipalities and political subdivisions | General obligations | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	109,696	144,143
Recurring | States, municipalities and political subdivisions | General obligations | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	48,641	58,409
Recurring | States, municipalities and political subdivisions | General obligations | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	141,519	128,369
Recurring | States, municipalities and political subdivisions | General obligations | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	113,011	113,731
Recurring | States, municipalities and political subdivisions | Special revenue | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	158,744	168,310
Recurring | States, municipalities and political subdivisions | Special revenue | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	79,760	68,065
Recurring | States, municipalities and political subdivisions | Special revenue | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	263,512	239,187
Recurring | States, municipalities and political subdivisions | Special revenue | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	158,307	131,744
Recurring | Foreign bonds | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	52,753	65,234
Recurring | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	209,144	215,674
Recurring | Corporate bonds | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	95,053	108,860
Recurring | Corporate bonds | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	221,707	229,903
Trading Securities	2,220	3,919
Recurring | Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	186,257	181,687
Trading Securities	1,535	127
Recurring | Corporate bonds | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	75,408	83,123
Trading Securities	3,741	3,410
Recurring | Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	148,979	144,612
Trading Securities	1,221	787
Recurring | Corporate bonds | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	283,151	273,951
Trading Securities	5,566	4,842
Recurring | Mortgage-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	13,691	17,248
Recurring | Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	157,483	144,460
Recurring | Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	199,152	174,458
Recurring | Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	105,432	101,896
Recurring | Asset-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	4,636	4,270
Recurring | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,535,070	1,453,286
Trading Securities	16,842	14,390
Recurring | Fixed maturities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,430,025	1,444,840
Trading Securities	0	0
Recurring | Fixed maturities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2,965,095	2,898,126
Recurring | Common stocks | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	22,439	19,671
Recurring | Common stocks | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	14,565	15,047
Recurring | Common stocks | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	66,519	51,794
Recurring | Common stocks | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	25,688	24,117
Recurring | Common stocks | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	40,103	27,420
Recurring | Common stocks | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	17,508	15,369
Recurring | Common stocks | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	116,447	115,950
Recurring | Nonredeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,297	1,048
Trading Securities	2,541	2,121
Recurring | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	280,913	246,370
Trading Securities	6,431	5,644
Recurring | Equity securities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	23,653	24,046
Trading Securities	0	0
Recurring | Equity securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	304,566	270,416
Recurring | Equity securities | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	874	613
Recurring | Equity securities | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	190	286
Recurring | Equity securities | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	989	877
Recurring | Equity securities | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	1,314	1,202
Recurring | Equity securities | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	325	339
Recurring | Equity securities | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	198	206
Recurring | Redeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	2,559	1,305
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	175	175
Money Market Accounts	6,147	4,810
Corporate-Owned Life Insurance	0	0
Recurring | Level 1 | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	0	0
Money Market Accounts	10,677	11,992
Corporate-Owned Life Insurance	0	0
Recurring | Level 1 | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	303,682	265,829
Trading Securities	8,990	6,949
Short-Term Investments	175	175
Money Market Accounts	16,824	16,802
Corporate-Owned Life Insurance	0	0
Total Assets Measured at Fair Value	329,671	289,755
Recurring | Level 1 | U.S. Treasury | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | U.S. government agency | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | General obligations | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | General obligations | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | General obligations | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | General obligations | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | Special revenue | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | Special revenue | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | Special revenue | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | States, municipalities and political subdivisions | Special revenue | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Foreign bonds | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Corporate bonds | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Corporate bonds | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 1 | Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 1 | Corporate bonds | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 1 | Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 1 | Corporate bonds | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 1 | Mortgage-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Asset-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	2,559	1,305
Recurring | Level 1 | Fixed maturities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 1 | Fixed maturities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 1 | Common stocks | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	22,439	19,671
Recurring | Level 1 | Common stocks | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	14,565	15,047
Recurring | Level 1 | Common stocks | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	66,517	51,794
Recurring | Level 1 | Common stocks | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	25,688	24,117
Recurring | Level 1 | Common stocks | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	40,103	27,420
Recurring | Level 1 | Common stocks | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	17,508	15,369
Recurring | Level 1 | Common stocks | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	116,447	111,958
Recurring | Level 1 | Nonredeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	415	453
Trading Securities	2,541	2,121
Recurring | Level 1 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	280,031	243,627
Trading Securities	6,431	5,644
Recurring | Level 1 | Equity securities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	23,651	22,202
Trading Securities	0	0
Recurring | Level 1 | Equity securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	303,682	265,829
Recurring | Level 1 | Equity securities | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	874	613
Recurring | Level 1 | Equity securities | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	190	286
Recurring | Level 1 | Equity securities | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	989	877
Recurring | Level 1 | Equity securities | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	1,314	1,202
Recurring | Level 1 | Equity securities | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	325	339
Recurring | Level 1 | Equity securities | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	198	206
Recurring | Level 1 | Redeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	2,559	1,305
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	4,029	2,592
Recurring | Level 2 | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	0	0
Recurring | Level 2 | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2,956,105	2,887,615
Trading Securities	14,283	13,085
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	4,029	2,592
Total Assets Measured at Fair Value	2,974,417	2,903,292
Recurring | Level 2 | U.S. Treasury | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	16,891	23,195
Recurring | Level 2 | U.S. government agency | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	122,168	77,597
Recurring | Level 2 | States, municipalities and political subdivisions | General obligations | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	109,696	144,143
Recurring | Level 2 | States, municipalities and political subdivisions | General obligations | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	48,641	58,409
Recurring | Level 2 | States, municipalities and political subdivisions | General obligations | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	141,519	128,369
Recurring | Level 2 | States, municipalities and political subdivisions | General obligations | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	113,011	113,731
Recurring | Level 2 | States, municipalities and political subdivisions | Special revenue | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	158,744	168,142
Recurring | Level 2 | States, municipalities and political subdivisions | Special revenue | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	79,760	68,065
Recurring | Level 2 | States, municipalities and political subdivisions | Special revenue | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	263,512	239,187
Recurring | Level 2 | States, municipalities and political subdivisions | Special revenue | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	158,307	131,744
Recurring | Level 2 | Foreign bonds | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	52,753	65,234
Recurring | Level 2 | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	209,144	215,674
Recurring | Level 2 | Corporate bonds | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	95,053	108,860
Recurring | Level 2 | Corporate bonds | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	221,707	229,903
Trading Securities	2,220	3,919
Recurring | Level 2 | Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	185,589	180,590
Trading Securities	1,535	127
Recurring | Level 2 | Corporate bonds | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	75,408	83,123
Trading Securities	3,741	3,410
Recurring | Level 2 | Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	148,979	144,612
Trading Securities	1,221	787
Recurring | Level 2 | Corporate bonds | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	275,474	265,154
Trading Securities	5,566	4,842
Recurring | Level 2 | Mortgage-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	13,691	17,248
Recurring | Level 2 | Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	157,483	144,460
Recurring | Level 2 | Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	199,152	174,458
Recurring | Level 2 | Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	105,432	101,896
Recurring | Level 2 | Asset-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	3,989	3,821
Recurring | Level 2 | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,534,323	1,452,737
Trading Securities	14,283	13,085
Recurring | Level 2 | Fixed maturities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,421,780	1,434,878
Trading Securities	0	0
Recurring | Level 2 | Fixed maturities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2,956,103	2,887,615
Recurring | Level 2 | Common stocks | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 2 | Common stocks | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 2 | Common stocks | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2	0
Recurring | Level 2 | Common stocks | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 2 | Common stocks | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 2 | Common stocks | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 2 | Common stocks | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 2 | Nonredeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 2 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2	0
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	2	0
Recurring | Level 2 | Equity securities | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 2 | Equity securities | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 2 | Redeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	0	0
Recurring | Level 3 | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	0	0
Recurring | Level 3 | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	9,874	15,098
Trading Securities	0	0
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	0	0
Total Assets Measured at Fair Value	9,874	15,098
Recurring | Level 3 | U.S. Treasury | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | U.S. government agency | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | General obligations | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | General obligations | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | General obligations | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | General obligations | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | Special revenue | Midwest | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	168
Recurring | Level 3 | States, municipalities and political subdivisions | Special revenue | Northeast | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | Special revenue | South | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | States, municipalities and political subdivisions | Special revenue | West | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Foreign bonds | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Corporate bonds | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Corporate bonds | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 3 | Corporate bonds | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	668	1,097
Trading Securities	0	0
Recurring | Level 3 | Corporate bonds | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 3 | Corporate bonds | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Trading Securities	0	0
Recurring | Level 3 | Corporate bonds | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	7,677	8,797
Trading Securities	0	0
Recurring | Level 3 | Mortgage-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Collateralized mortgage obligations | Government national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Collateralized mortgage obligations | Federal home loan mortgage corporation | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Collateralized mortgage obligations | Federal national mortgage association | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Asset-backed securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	647	449
Recurring | Level 3 | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	747	549
Trading Securities	0	0
Recurring | Level 3 | Fixed maturities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	8,245	9,962
Trading Securities	0	0
Recurring | Level 3 | Fixed maturities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	8,992	10,511
Recurring | Level 3 | Common stocks | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Common stocks | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Common stocks | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Common stocks | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Common stocks | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Common stocks | Technology, media and telecommunications | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Recurring | Level 3 | Common stocks | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	3,992
Recurring | Level 3 | Nonredeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	882	595
Trading Securities	0	0
Recurring | Level 3 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	882	2,743
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	1,844
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	882	4,587
Recurring | Level 3 | Equity securities | Public utilities | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Energy | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Industrials | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Consumer goods and services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Health care | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3 | Equity securities | Financial services | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	0	0
Recurring | Level 3 | Redeemable preferred stocks | Continuing and Discontinuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	$ 0	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Level 3 Securities) (Details) - Continuing and Discontinuing Operations - Recurring - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 15,098	$ 16,252
Realized gains (losses)		0
Unrealized gains (losses)	348	80
Purchases	245	727
Disposals	(5,817)	(1,961)
Ending Balance	9,874	15,098
States, municipalities and political subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	168	343
Realized gains (losses)		0
Unrealized gains (losses)	(8)	(15)
Purchases	0	0
Disposals	(160)	(160)
Ending Balance	0	168
Corporate bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	9,894	10,895
Realized gains (losses)		0
Unrealized gains (losses)	(129)	134
Purchases	100	0
Disposals	(1,520)	(1,135)
Ending Balance	8,345	9,894
Asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	449	1,036
Realized gains (losses)		0
Unrealized gains (losses)	198	(39)
Purchases	0	0
Disposals	0	(548)
Ending Balance	647	449
Equities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	4,587	3,978
Realized gains (losses)		0
Unrealized gains (losses)	287	0
Purchases	145	727
Disposals	(4,137)	(118)
Ending Balance	$ 882	$ 4,587

XML

REINSURANCE (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) insurance_agency	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Reinsurance [Line Items]
Reinsurance recoverables	$ 63,194,000	$ 62,707,000
Continuing Operations - Property and Casualty Insurance
Reinsurance [Line Items]
Reinsurance recoverables	$ 2,859,000	$ 2,447,000
Continuing Operations - Property and Casualty Insurance | Casualty Excess and Property Excess
Reinsurance [Line Items]
Reinsurance retention policy, reinsured risk, percentage	7.02%	7.73%
Aggregate annual deductible			$ 4,000,000
Minimum | Continuing Operations - Property and Casualty Insurance | Casualty Excess and Property Excess
Reinsurance [Line Items]
Retention amount	$ 58,500,000	$ 52,000,000
Maximum | Continuing Operations - Property and Casualty Insurance | Casualty Excess and Property Excess
Reinsurance [Line Items]
Reinsurance recoverables	30,000,000	30,000,000
Retention amount	$ 71,500,000	$ 65,000,000
Discontinued Operations | Discontinued Operations - Life Insurance
Reinsurance [Line Items]
Number of reinsurers ceded approximately 99% of ceded life insurance in force | insurance_agency	5
Discontinued Operations | Discontinued Operations - Life Insurance | Top Five Reinsurers
Reinsurance [Line Items]
Percentage of insurance in force	99.00%
Discontinued Operations | Discontinued Operations - Life Insurance | Individual Insurance Policies
Reinsurance [Line Items]
Stated retention	$ 300,000
Percentage of coverage	100.00%
Reinsurance coverage amount	$ 250,000
Discontinued Operations | Discontinued Operations - Life Insurance | Group Insurance Policies
Reinsurance [Line Items]
Percentage of coverage	50.00%
Discontinued Operations | Discontinued Operations - Life Insurance | Catastrophe
Reinsurance [Line Items]
Stated retention	$ 1,000,000
Reinsurance coverage amount	$ 5,000,000

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REINSURANCE (Ceded and Assumed Reinsurance) (Details) - Continuing Operations - Property and Casualty Insurance - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reinsurance [Line Items]
Ceded premiums written	$ 61,273	$ 57,988	$ 56,916
Ceded premiums earned	61,305	57,996	56,758
Loss and loss settlement expenses ceded	33,303	13,278	3,868
Assumed premiums written	15,179	16,834	18,290
Assumed premiums earned	15,059	17,037	18,396
Loss and loss settlement expenses assumed	$ 24,688	$ 9,814	$ 14,415

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REINSURANCE (Reinsurance Programs) (Details) - Continuing Operations - Property and Casualty Insurance - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Casualty excess of loss
Reinsurance [Line Items]
Stated Retention	$ 2,500,000	$ 2,500,000	$ 2,000,000
Limits	$ 60,000,000	$ 40,000,000	$ 40,000,000
Percentage of Coverage	100.00%	100.00%	100.00%
Coverage	$ 57,500,000	$ 37,500,000	$ 38,000,000
Property excess of loss
Reinsurance [Line Items]
Stated Retention	2,500,000	2,500,000	2,000,000
Limits	$ 25,000,000	$ 25,000,000	$ 25,000,000
Percentage of Coverage	100.00%	100.00%	100.00%
Coverage	$ 22,500,000	$ 22,500,000	$ 23,000,000
Surety excess of loss
Reinsurance [Line Items]
Stated Retention	1,500,000	1,500,000	1,500,000
Limits	$ 45,000,000	$ 36,000,000	$ 36,000,000
Percentage of Coverage	100.00%	100.00%	96.00%
Coverage	$ 43,500,000	$ 34,500,000	$ 34,500,000
Property catastrophe, excess
Reinsurance [Line Items]
Stated Retention	20,000,000	20,000,000	20,000,000
Limits	$ 250,000,000	$ 250,000,000	$ 200,000,000
Percentage of Coverage	100.00%	100.00%	100.00%
Coverage	$ 230,000,000	$ 230,000,000	$ 180,000,000
Property catastrophe, excess two
Reinsurance [Line Items]
Stated Retention			200,000,000
Limits			$ 250,000,000
Percentage of Coverage			90.50%
Coverage			$ 50,000,000
Boiler and machinery
Reinsurance [Line Items]
Limits	$ 50,000,000	$ 50,000,000	$ 50,000,000
Percentage of Coverage	100.00%	100.00%	100.00%
Coverage	$ 50,000,000	$ 50,000,000	$ 50,000,000

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REINSURANCE (Discontinued Operations - Life Insurance Business) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reinsurance [Line Items]
Ceded insurance in-force	$ 1,014,794	$ 1,023,197	$ 1,165,868
Discontinued Operations | Discontinued Operations - Life Insurance
Reinsurance [Line Items]
Ceded insurance in-force	1,014,794	1,023,197	1,165,868
Ceded premiums earned	2,722	2,768	3,161
Loss and loss settlement expenses ceded	$ 3,726	$ 3,359	$ 2,113

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Gross liability for losses and loss settlement expenses at beginning of year	$ 1,123,896	$ 1,003,895	$ 969,437
Ceded losses and loss settlement expenses	(59,794)	(54,653)	(63,757)
Net liability for losses and loss settlement expenses at beginning of year	1,064,102	949,242	905,680
Losses and loss settlement expenses incurred for claims occurring during
Current year	779,966	683,662	560,482
Prior years	(54,253)	(31,229)	(40,395)
Total incurred	725,713	652,433	520,087
Losses and loss settlement expense payments for claims occurring during
Current year	311,972	277,053	225,022
Prior years	313,531	260,520	251,503
Total paid	625,503	537,573	476,525
Net liability for losses and loss settlement expenses at end of year	1,164,312	1,064,102	949,242
Ceded loss and loss settlement expenses	59,871	59,794	54,653
Gross liability for losses and loss settlement expenses at end of year	$ 1,224,183	$ 1,123,896	$ 1,003,895

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES (Incurred Claims and Allocated Claim Adjustment Expenses) (Details) claim in Thousands, $ in Thousands	Dec. 31, 2017 USD ($) claim	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)
Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 986,070
Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	1,153,596
Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	1,151,392
Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	491,813
Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	435,063
2008 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	75,364	$ 74,915	$ 74,115	$ 75,178	$ 78,152	$ 63,231	$ 73,892	$ 81,963	$ 84,944	$ 79,455
Total of incurred but not reported liabilities plus expected development on reported claims	12,636
Cumulative development	$ (4,091)
Cumulative number of reported claims | claim	6,734
2008 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 118,308	118,329	118,376	118,115	116,940	134,821	140,321	138,602	141,384	157,303
Total of incurred but not reported liabilities plus expected development on reported claims	44
Cumulative development	$ (38,995)
Cumulative number of reported claims | claim	21,101
2008 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 73,487	73,463	73,431	73,506	75,021	75,070	76,527	76,051	78,391	80,461
Total of incurred but not reported liabilities plus expected development on reported claims	12
Cumulative development	$ (6,974)
Cumulative number of reported claims | claim	18,114
2008 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 38,664	39,768	39,680	39,386	40,010	40,474	41,278	39,895	42,301	42,739
Total of incurred but not reported liabilities plus expected development on reported claims	499
Cumulative development	$ (4,075)
Cumulative number of reported claims | claim	5,057
2008 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 42,881	42,882	43,482	43,515	43,535	43,577	43,672	43,408	44,686	$ 49,961
Total of incurred but not reported liabilities plus expected development on reported claims	0
Cumulative development	$ (7,080)
Cumulative number of reported claims | claim	15,821
2009 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 86,543	86,757	85,761	83,660	84,286	65,831	73,545	85,991	88,298
Total of incurred but not reported liabilities plus expected development on reported claims	11,268
Cumulative development	$ (1,755)
Cumulative number of reported claims | claim	6,123
2009 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 89,027	88,891	87,932	87,845	87,751	105,614	105,031	106,085	113,754
Total of incurred but not reported liabilities plus expected development on reported claims	154
Cumulative development	$ (24,727)
Cumulative number of reported claims | claim	18,038
2009 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 63,509	63,567	63,560	63,605	64,516	64,121	68,569	69,328	80,021
Total of incurred but not reported liabilities plus expected development on reported claims	0
Cumulative development	$ (16,512)
Cumulative number of reported claims | claim	15,019
2009 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 35,012	35,026	36,014	36,158	36,823	36,837	36,294	39,009	43,560
Total of incurred but not reported liabilities plus expected development on reported claims	489
Cumulative development	$ (8,548)
Cumulative number of reported claims | claim	4,264
2009 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 31,867	32,070	32,085	32,029	32,134	32,026	31,945	33,519	$ 34,597
Total of incurred but not reported liabilities plus expected development on reported claims	2
Cumulative development	$ (2,730)
Cumulative number of reported claims | claim	13,502
2010 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 78,498	78,291	77,948	78,564	82,865	65,299	69,533	88,987
Total of incurred but not reported liabilities plus expected development on reported claims	14,468
Cumulative development	$ (10,489)
Cumulative number of reported claims | claim	5,174
2010 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 84,213	83,981	83,767	83,932	83,836	108,246	106,152	113,139
Total of incurred but not reported liabilities plus expected development on reported claims	229
Cumulative development	$ (28,926)
Cumulative number of reported claims | claim	16,671
2010 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 67,910	68,086	67,296	67,563	67,015	65,860	68,068	75,781
Total of incurred but not reported liabilities plus expected development on reported claims	17
Cumulative development	$ (7,871)
Cumulative number of reported claims | claim	16,245
2010 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 42,617	41,468	41,422	40,647	41,167	41,180	42,531	38,210
Total of incurred but not reported liabilities plus expected development on reported claims	596
Cumulative development	$ 4,407
Cumulative number of reported claims | claim	3,978
2010 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 33,213	33,432	33,413	33,403	33,865	33,928	34,347	$ 36,686
Total of incurred but not reported liabilities plus expected development on reported claims	29
Cumulative development	$ (3,473)
Cumulative number of reported claims | claim	13,325
2011 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 81,463	80,801	79,591	88,200	88,371	64,738	81,522
Total of incurred but not reported liabilities plus expected development on reported claims	15,016
Cumulative development	$ (59)
Cumulative number of reported claims | claim	5,328
2011 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 121,434	120,219	119,820	120,492	117,082	142,330	148,220
Total of incurred but not reported liabilities plus expected development on reported claims	611
Cumulative development	$ (26,786)
Cumulative number of reported claims | claim	16,026
2011 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 90,766	91,336	92,379	92,519	90,750	87,299	84,887
Total of incurred but not reported liabilities plus expected development on reported claims	311
Cumulative development	$ 5,879
Cumulative number of reported claims | claim	15,246
2011 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 33,352	33,314	33,585	34,309	35,352	38,481	39,967
Total of incurred but not reported liabilities plus expected development on reported claims	747
Cumulative development	$ (6,615)
Cumulative number of reported claims | claim	3,930
2011 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 46,733	47,013	46,968	47,035	47,090	48,534	$ 50,014
Total of incurred but not reported liabilities plus expected development on reported claims	74
Cumulative development	$ (3,281)
Cumulative number of reported claims | claim	14,843
2012 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 91,346	92,537	91,980	94,195	96,158	100,389
Total of incurred but not reported liabilities plus expected development on reported claims	18,407
Cumulative development	$ (9,043)
Cumulative number of reported claims | claim	5,540
2012 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 108,623	107,958	108,047	108,774	110,448	138,602
Total of incurred but not reported liabilities plus expected development on reported claims	970
Cumulative development	$ (29,979)
Cumulative number of reported claims | claim	6,408
2012 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 96,389	96,594	95,321	94,755	90,848	100,039
Total of incurred but not reported liabilities plus expected development on reported claims	488
Cumulative development	$ (3,650)
Cumulative number of reported claims | claim	14,353
2012 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 39,015	38,553	38,423	42,158	46,279	48,848
Total of incurred but not reported liabilities plus expected development on reported claims	754
Cumulative development	$ (9,833)
Cumulative number of reported claims | claim	3,813
2012 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 44,352	44,715	46,150	46,403	46,199	$ 47,924
Total of incurred but not reported liabilities plus expected development on reported claims	108
Cumulative development	$ (3,572)
Cumulative number of reported claims | claim	10,769
2013 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 85,399	86,119	90,502	91,460	104,982
Total of incurred but not reported liabilities plus expected development on reported claims	9,697
Cumulative development	$ (19,583)
Cumulative number of reported claims | claim	6,007
2013 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 93,826	92,212	91,498	88,550	91,521
Total of incurred but not reported liabilities plus expected development on reported claims	1,139
Cumulative development	$ 2,305
Cumulative number of reported claims | claim	6,598
2013 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 104,980	103,726	102,943	98,037	104,356
Total of incurred but not reported liabilities plus expected development on reported claims	1,310
Cumulative development	$ 624
Cumulative number of reported claims | claim	15,504
2013 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 52,761	54,584	56,369	62,579	64,048
Total of incurred but not reported liabilities plus expected development on reported claims	975
Cumulative development	$ (11,287)
Cumulative number of reported claims | claim	4,173
2013 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 36,729	37,086	37,262	38,525	$ 39,232
Total of incurred but not reported liabilities plus expected development on reported claims	172
Cumulative development	$ (2,503)
Cumulative number of reported claims | claim	9,232
2014 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 97,809	106,486	117,958	118,928
Total of incurred but not reported liabilities plus expected development on reported claims	13,583
Cumulative development	$ (21,119)
Cumulative number of reported claims | claim	6,109
2014 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 128,185	128,762	131,198	126,216
Total of incurred but not reported liabilities plus expected development on reported claims	1,397
Cumulative development	$ 1,969
Cumulative number of reported claims | claim	7,827
2014 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 118,869	113,720	106,076	107,723
Total of incurred but not reported liabilities plus expected development on reported claims	3,634
Cumulative development	$ 11,146
Cumulative number of reported claims | claim	17,222
2014 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 56,630	58,284	60,729	64,051
Total of incurred but not reported liabilities plus expected development on reported claims	1,409
Cumulative development	$ (7,421)
Cumulative number of reported claims | claim	4,593
2014 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 52,782	52,944	52,661	$ 53,910
Total of incurred but not reported liabilities plus expected development on reported claims	236
Cumulative development	$ (1,128)
Cumulative number of reported claims | claim	10,899
2015 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 120,005	125,307	137,386
Total of incurred but not reported liabilities plus expected development on reported claims	25,634
Cumulative development	$ (17,381)
Cumulative number of reported claims | claim	7,083
2015 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 110,633	108,293	103,177
Total of incurred but not reported liabilities plus expected development on reported claims	3,370
Cumulative development	$ 7,456
Cumulative number of reported claims | claim	7,465
2015 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 132,206	129,816	125,506
Total of incurred but not reported liabilities plus expected development on reported claims	7,874
Cumulative development	$ 6,700
Cumulative number of reported claims | claim	19,875
2015 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 51,003	55,578	53,788
Total of incurred but not reported liabilities plus expected development on reported claims	1,753
Cumulative development	$ (2,785)
Cumulative number of reported claims | claim	5,311
2015 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 40,336	41,088	$ 42,848
Total of incurred but not reported liabilities plus expected development on reported claims	396
Cumulative development	$ (2,512)
Cumulative number of reported claims | claim	9,490
2016 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 130,041	139,144
Total of incurred but not reported liabilities plus expected development on reported claims	35,760
Cumulative development	$ (9,103)
Cumulative number of reported claims | claim	7,512
2016 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 144,208	147,473
Total of incurred but not reported liabilities plus expected development on reported claims	3,597
Cumulative development	$ (3,265)
Cumulative number of reported claims | claim	9,496
2016 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 175,357	174,018
Total of incurred but not reported liabilities plus expected development on reported claims	21,439
Cumulative development	$ 1,339
Cumulative number of reported claims | claim	26,662
2016 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 66,575	70,419
Total of incurred but not reported liabilities plus expected development on reported claims	3,392
Cumulative development	$ (3,844)
Cumulative number of reported claims | claim	6,732
2016 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 45,840	$ 48,072
Total of incurred but not reported liabilities plus expected development on reported claims	733
Cumulative development	$ (2,232)
Cumulative number of reported claims | claim	11,674
2017 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 139,602
Total of incurred but not reported liabilities plus expected development on reported claims	$ 68,465
Cumulative number of reported claims | claim	5,833
2017 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 155,139
Total of incurred but not reported liabilities plus expected development on reported claims	$ 16,178
Cumulative number of reported claims | claim	11,574
2017 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 227,919
Total of incurred but not reported liabilities plus expected development on reported claims	$ 58,850
Cumulative number of reported claims | claim	28,858
2017 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 76,184
Total of incurred but not reported liabilities plus expected development on reported claims	$ 7,317
Cumulative number of reported claims | claim	5,460
2017 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred losses and allocated loss settlement expenses, net of reinsurance	$ 60,330
Total of incurred but not reported liabilities plus expected development on reported claims	$ 3,310
Cumulative number of reported claims | claim	13,049

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES (Cumulative Paid Claims and Allocated Claim Adjustment Expenses) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Liability for Claims and Claims Adjustment Expense [Line Items]
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	$ 1,073,195
Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	571,484
All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance	29,167
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	443,753
Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	1,049,363
All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance	573
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	104,806
Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	866,879
All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance	39
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	284,552
Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	342,146
All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance	18,973
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	168,640
Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	408,654
All outstanding liabilities for unpaid losses and loss settlement expenses before 2008, net of reinsurance	1,326
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	27,735
2008 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	60,698	$ 59,052	$ 55,843	$ 52,659	$ 50,143	$ 47,112	$ 42,545	$ 34,482	$ 24,096	$ 9,220
2008 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	118,059	118,003	117,690	117,553	115,897	115,804	112,678	107,480	102,804	80,005
2008 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	73,394	73,018	72,990	72,984	72,122	70,459	68,629	58,926	47,271	30,527
2008 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	36,010	35,292	34,862	34,319	33,770	31,980	30,123	25,736	21,227	10,082
2008 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	42,881	42,787	42,748	42,748	42,627	42,613	42,414	41,735	40,114	$ 32,032
2009 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	70,814	67,733	63,149	56,789	50,098	41,696	32,073	21,151	8,375
2009 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	88,159	88,037	87,721	87,544	86,930	82,809	77,732	72,181	53,219
2009 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	63,508	63,503	63,495	62,732	61,398	58,087	53,451	44,867	27,674
2009 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	33,117	32,911	31,886	31,003	29,898	27,747	24,189	20,292	10,478
2009 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	31,837	31,804	31,718	31,644	31,564	30,829	29,801	27,926	$ 22,086
2010 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	62,070	60,116	56,761	51,336	35,043	24,577	15,230	7,103
2010 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	83,915	83,374	83,000	82,037	80,352	78,284	72,271	52,660
2010 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	67,852	67,622	65,169	62,231	57,947	52,953	41,141	29,329
2010 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	38,973	35,052	34,143	33,119	31,887	28,765	22,606	11,821
2010 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	33,158	33,165	32,997	32,771	32,076	31,340	29,867	$ 24,499
2011 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	62,165	56,150	50,146	40,595	26,260	13,670	6,236
2011 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	120,178	118,183	116,614	112,497	109,429	104,800	85,585
2011 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	88,609	87,475	85,348	79,383	65,021	50,931	34,332
2011 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	29,453	29,022	28,247	27,497	26,033	21,678	10,322
2011 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	46,575	46,573	46,487	45,949	45,306	43,801	$ 36,489
2012 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	69,800	64,574	55,316	39,948	24,620	6,875
2012 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	106,521	105,250	103,197	100,078	94,380	71,008
2012 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	93,179	90,292	82,944	71,469	57,201	39,247
2012 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	34,330	33,063	30,933	28,397	23,023	11,802
2012 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	44,139	43,569	44,448	43,375	41,979	$ 30,415
2013 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	65,773	54,559	39,953	25,228	9,835
2013 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	89,200	86,115	82,853	78,226	59,331
2013 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	96,375	90,780	79,663	67,630	43,592
2013 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	45,078	42,941	38,023	30,209	14,136
2013 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	36,155	35,306	34,297	32,788	$ 25,505
2014 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	70,363	50,211	29,679	10,207
2014 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	122,370	116,750	113,663	84,456
2014 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	99,922	87,590	68,033	45,704
2014 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	42,964	38,441	30,289	13,965
2014 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	51,837	49,710	47,912	$ 37,055
2015 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	53,901	27,182	11,185
2015 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	95,515	90,454	67,217
2015 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	99,201	78,225	50,782
2015 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	35,229	27,304	12,063
2015 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	39,027	37,431	$ 29,551
2016 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	38,184	13,782
2016 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	125,962	92,895
2016 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	103,528	66,013
2016 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	32,345	14,413
2016 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	40,910	$ 32,999
2017 | Commercial other liability
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	17,716
2017 | Commercial fire and allied
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	99,484
2017 | Commercial automobile
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	81,311
2017 | Workers' compensation
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	14,647
2017 | Personal
Liability for Claims and Claims Adjustment Expense [Line Items]
Cumulative paid losses and allocated loss settlement expenses, net of reinsurance	$ 42,135

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES (Reconciliation of the Disclosure Claims Development to the Liability for Claims and Claim Adjustment Expenses) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	$ 1,073,195
Net outstanding liabilities for unpaid unallocated loss settlement expenses	88,193
Fair value adjustment (purchase accounting adjustment for Mercer acquisition)	2,924
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	1,164,312
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	62,667
Reinsurance fair value amortization (purchase accounting adjustment for Mercer acquisition)	(2,796)
Total reinsurance recoverable on unpaid losses and loss settlement expenses	59,871
Total gross liability for unpaid losses and loss settlement expenses	1,224,183	$ 1,123,896	$ 1,003,895	$ 969,437
Commercial other liability
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	443,753
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	20,367
Commercial fire and allied
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	104,806
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	10,806
Commercial automobile
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	284,552
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	1,994
Commercial workers' compensation
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	168,640
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	26,799
Personal
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	27,735
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	26
All other lines
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	43,709
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	$ 2,675

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RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES (Historical Claims Duration) (Details)	Dec. 31, 2017
Commercial other liability
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	10.10%
Year 2	15.90%
Year 3	16.40%
Year 4	15.30%
Year 5	11.90%
Year 6	6.40%
Year 7	5.60%
Year 8	4.00%
Year 9	3.90%
Year 10	2.20%
Commercial fire and allied
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	64.40%
Year 2	20.90%
Year 3	4.80%
Year 4	3.70%
Year 5	3.00%
Year 6	0.90%
Year 7	0.90%
Year 8	0.40%
Year 9	0.20%
Year 10	0.00%
Commercial automobile
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	39.90%
Year 2	20.90%
Year 3	15.10%
Year 4	10.90%
Year 5	5.60%
Year 6	2.80%
Year 7	1.80%
Year 8	0.10%
Year 9	0.00%
Year 10	0.50%
Commercial workers' compensation
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	26.10%
Year 2	29.00%
Year 3	13.60%
Year 4	8.10%
Year 5	4.30%
Year 6	3.20%
Year 7	1.80%
Year 8	4.50%
Year 9	0.80%
Year 10	1.90%
Personal
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Year 1	71.90%
Year 2	19.10%
Year 3	4.00%
Year 4	2.50%
Year 5	1.10%
Year 6	0.50%
Year 7	0.30%
Year 8	0.10%
Year 9	0.10%
Year 10	0.20%

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STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS (Statutory Capital and Surplus) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and casualty business
Statutory Accounting Practices [Line Items]
Statutory Capital and Surplus	$ 757,443	$ 770,908	$ 722,404
Statutory Net Income (Loss)	19,687	39,087	75,554
Life, accident and health business
Statutory Accounting Practices [Line Items]
Statutory Capital and Surplus	144,533	139,806	138,855
Statutory Net Income (Loss)	$ 5,485	$ (3,177)	$ (1,524)

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STATUTORY REPORTING, CAPITAL REQUIREMENTS AND DIVIDENDS AND RETAINED EARNINGS RESTRICTIONS (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Feb. 02, 2016
Statutory Accounting Practices [Line Items]
Maximum borrowing capacity	$ 100,000,000
Payment of cash dividends	(27,337,000)	$ (24,591,000)	$ (21,658,000)
Subsidiaries
Statutory Accounting Practices [Line Items]
Intercompany dividend payments that are eliminated in Consolidated Financial Statements	13,300,000	26,000,000	16,500,000
United Fire & Casualty Company
Statutory Accounting Practices [Line Items]
Intercompany dividend payments that are eliminated in Consolidated Financial Statements	40,000,000	$ 24,000,000	$ 22,500,000
United Life
Statutory Accounting Practices [Line Items]
Statutory basis	1,497,955,000
Net assets on statutory basis, in excess of the legal reserve requirement	215,488,000
Revolving Credit Facility
Statutory Accounting Practices [Line Items]
Maximum borrowing capacity	50,000,000			$ 50,000,000
State of Iowa Insurance Department
Statutory Accounting Practices [Line Items]
Maximum dividend distribution without prior approval	$ 35,744,000

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FEDERAL INCOME TAX (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Valuation Allowance [Line Items]
Provisional income tax expense, Tax Act	$ 21,884
Valuation allowance	329	$ 718
Realization of NOLs	1,565
Deferred tax asset adjustment related to the enactment of the Tax Act	158
Alternative minimum tax credit carryforward	6,011	1,194
Valuation Allowance, Operating Loss Carryforwards
Valuation Allowance [Line Items]
Reduction in valuation allowance, before Tax Act adjustment	547
Reduction in valuation allowance	$ 389	$ 547

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FEDERAL INCOME TAX (Federal Income Tax) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation Of Consolidated Federal Income Tax Expense (Benefit) [Line Items]
Consolidated federal income tax expense (benefit)	$ (29,220)	$ 8,379	$ 30,050
Continuing and Discontinuing Operations
Reconciliation Of Consolidated Federal Income Tax Expense (Benefit) [Line Items]
Current	1,989	3,239	37,649
Deferred	(26,719)	5,524	(5,324)
Consolidated federal income tax expense (benefit)	$ (24,730)	$ 8,763	$ 32,325

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FEDERAL INCOME TAX (Reconciliation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation Of Consolidated Federal Income Tax Expense (Benefit) [Line Items]
Consolidated federal income tax expense (benefit)	$ (29,220)	$ 8,379	$ 30,050
Consolidated federal income tax expense (benefit), discontinued operations	4,490	384	2,275
Continuing and Discontinuing Operations
Reconciliation Of Consolidated Federal Income Tax Expense (Benefit) [Line Items]
Computed expected income tax expense	9,202	20,533	42,508
Impact of enactment of Tax Act	(21,884)	0	0
Tax-exempt municipal bond interest income	(8,875)	(8,330)	(7,669)
Nontaxable dividend income	(1,540)	(1,317)	(1,337)
Valuation allowance reduction	(547)	(547)	(548)
Other, net	(1,086)	(1,576)	(629)
Consolidated federal income tax expense (benefit)	$ (24,730)	$ 8,763	$ 32,325

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FEDERAL INCOME TAX (Net Deferred Tax Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax liabilities
Deferred policy acquisition costs	$ 30,404	$ 52,031
Investments in partnerships	3,653	8,112
Prepaid pension cost	3,416	4,449
Net bond discount accretion	666	1,134
Depreciation	593	854
Revaluation of investment basis	545	1,342
Identifiable intangible assets	1,838	3,311
Other	1,934	2,831
Gross deferred tax liability	101,487	148,415
Deferred tax assets
Financial statement reserves in excess of income tax reserves	17,036	29,174
Unearned premium adjustment	19,389	30,697
Net operating loss carryforwards	329	718
Underfunded benefit plan obligation	12,375	13,374
Post-retirement benefits other than pensions	11,942	20,221
Other-than-temporary impairment of investments	2,313	4,658
Contingent ceding commission accrual	317	2,769
Alternative minimum tax credit carryforward	6,011	1,194
Compensation expense related to stock options	3,289	4,578
Other	4,145	6,162
Gross deferred tax asset	77,146	113,545
Valuation allowance	(329)	(718)
Deferred tax asset	76,817	112,827
Net deferred tax liability	24,670	35,588
Equity securities
Deferred tax liabilities
Net unrealized appreciation on investment securities	50,839	70,640
All other securities
Deferred tax liabilities
Net unrealized appreciation on investment securities	$ 7,599	$ 3,711

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EMPLOYEE BENEFITS (Narrative) (Details)		12 Months Ended
	Jan. 01, 2017 USD ($)	Dec. 31, 2017 USD ($) program investment_manager
Defined Benefit Plan Disclosure [Line Items]
Number of programs offered under health and dental benefit plan | program		2
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Eligibility, minimum required service period		1 year
Eligibility, minimum age		21 years
Estimated employer contribution in next fiscal year		$ 6,400,000
Retirement plan, employee deductible	$ 500
Percentage of retirement plan owed by employees 65 or older	50.00%
Percentage of retirement plan owed by employees less 65	100.00%
Number of external investment managers | investment_manager		6

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EMPLOYEE BENEFITS (Asset Allocation) (Details) - Pension Benefits - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 157,644	$ 128,430	$ 106,600
Actual % of total	100.00%	100.00%
Fixed maturity securities - corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 11,003	$ 9,451
Actual % of total	7.00%	7.40%
Redeemable preferred stock
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 3,216	$ 3,144
Actual % of total	2.00%	2.40%
Equity securities
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 87,603	$ 69,770
Actual % of total	55.60%	54.30%
Core plus bond separate account fund
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 17,948	$ 10,401
Actual % of total	11.40%	8.10%
U.S. property separate account fund
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 15,502	$ 14,330
Actual % of total	9.80%	11.10%
Arbitrage fund
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 8,506	$ 8,292
Actual % of total	5.40%	6.50%
United Life annuity
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 9,846	$ 9,377
Actual % of total	6.20%	7.30%
Cash and cash equivalents
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 4,020	$ 3,665
Actual % of total	2.60%	2.90%
Minimum | Fixed maturity securities - corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Target allocation	0.00%
Minimum | Redeemable preferred stock
Defined Benefit Plan Disclosure [Line Items]
Target allocation	0.00%
Minimum | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation	50.00%
Minimum | Core plus bond separate account fund
Defined Benefit Plan Disclosure [Line Items]
Target allocation	0.00%
Minimum | U.S. property separate account fund
Defined Benefit Plan Disclosure [Line Items]
Target allocation	0.00%
Minimum | Arbitrage fund
Defined Benefit Plan Disclosure [Line Items]
Target allocation	0.00%
Minimum | United Life annuity
Defined Benefit Plan Disclosure [Line Items]
Target allocation	5.00%
Minimum | Cash and cash equivalents
Defined Benefit Plan Disclosure [Line Items]
Target allocation	0.00%
Maximum | Fixed maturity securities - corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Target allocation	15.00%
Maximum | Redeemable preferred stock
Defined Benefit Plan Disclosure [Line Items]
Target allocation	10.00%
Maximum | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation	70.00%
Maximum | Core plus bond separate account fund
Defined Benefit Plan Disclosure [Line Items]
Target allocation	40.00%
Maximum | U.S. property separate account fund
Defined Benefit Plan Disclosure [Line Items]
Target allocation	25.00%
Maximum | Arbitrage fund
Defined Benefit Plan Disclosure [Line Items]
Target allocation	10.00%
Maximum | United Life annuity
Defined Benefit Plan Disclosure [Line Items]
Target allocation	10.00%
Maximum | Cash and cash equivalents
Defined Benefit Plan Disclosure [Line Items]
Target allocation	10.00%

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EMPLOYEE BENEFITS (Fair Value of Plan Assets) (Details) - Pension Benefits - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	$ 157,644	$ 128,430	$ 106,600
Fixed maturity securities - corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	11,003	9,451
Redeemable preferred stock
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	3,216	3,144
Equity securities
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	87,603	69,770
Core plus bond separate account fund
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	17,948	10,401
U.S. property separate account fund
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	15,502	14,330
U.S. property separate account fund | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	15,502	14,330	$ 11,252
Arbitrage fund
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	8,506	8,292
Recurring
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	147,789	119,047
Recurring | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	94,830	76,573
Recurring | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	37,457	28,144
Recurring | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	15,502	14,330
Recurring | Fixed maturity securities - corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	11,003	9,451
Recurring | Fixed maturity securities - corporate bonds | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Fixed maturity securities - corporate bonds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	11,003	9,451
Recurring | Fixed maturity securities - corporate bonds | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Redeemable preferred stock
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	3,216	3,144
Recurring | Redeemable preferred stock | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	3,216	3,144
Recurring | Redeemable preferred stock | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Redeemable preferred stock | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	87,603	69,770
Recurring | Equity securities | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	87,603	69,770
Recurring | Equity securities | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Equity securities | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Core plus bond separate account fund
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	17,948	10,401
Recurring | Core plus bond separate account fund | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Core plus bond separate account fund | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	17,948	10,401
Recurring | Core plus bond separate account fund | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | U.S. property separate account fund
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	15,502	14,330
Recurring | U.S. property separate account fund | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | U.S. property separate account fund | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | U.S. property separate account fund | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	15,502	14,330
Recurring | Arbitrage fund
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	8,506	8,292
Recurring | Arbitrage fund | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Arbitrage fund | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	8,506	8,292
Recurring | Arbitrage fund | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Money market funds
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	4,011	3,659
Recurring | Money market funds | Level 1
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	4,011	3,659
Recurring | Money market funds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	0	0
Recurring | Money market funds | Level 3
Defined Benefit Plan Disclosure [Line Items]
Assets measured at fair value	$ 0	$ 0

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EMPLOYEE BENEFITS (Change in Fair Value of Pension Plan Assets) (Details) - Pension Benefits - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	$ 128,430	$ 106,600
Fair value of plan assets at end of year	157,644	128,430
U.S. property separate account fund
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	14,330
Fair value of plan assets at end of year	15,502	14,330
U.S. property separate account fund | Level 3
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	14,330	11,252
Unrealized gains	1,172	1,078
Purchases		2,000
Fair value of plan assets at end of year	$ 15,502	$ 14,330

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EMPLOYEE BENEFITS (Assumptions) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Assumptions Used to Determine Benefit Obligations [Abstract]
Rate of compensation increase	3.00%	3.00%
Assumptions Used to Determine Net Periodic Benefit Cost [Abstract]
Expected long-term rate of return on plan assets	7.50%	7.50%	7.50%
Rate of compensation increase	3.00%	3.00%	3.00%
Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract]
Effect of 1% increase on the net periodic postretirement health care benefit cost	$ 1,126
Effect of 1% decrease on the net periodic postretirement health care benefit cost	(883)
Effect of 1% increase on the accumulated postretirement benefit obligation	9,487
Effect of 1% decrease on the accumulated postretirement benefit obligation	$ (7,698)
Pension Benefits
Assumptions Used to Determine Benefit Obligations [Abstract]
Discount rate	3.65%	4.17%
Assumptions Used to Determine Net Periodic Benefit Cost [Abstract]
Discount rate	4.17%	4.21%	3.86%
Post-retirement Benefits
Assumptions Used to Determine Benefit Obligations [Abstract]
Discount rate	3.65%	4.17%
Assumptions Used to Determine Net Periodic Benefit Cost [Abstract]
Discount rate	4.17%	4.21%	3.86%
Health Care Benefits
Assumed Health Care Cost Trend Rates [Abstract]
Health care cost trend rates assumed for next year	7.00%	7.00%
Rate to which the health care trend rate is assumed to decline (ultimate trend rate)	4.50%	4.50%
Dental Claims
Assumed Health Care Cost Trend Rates [Abstract]
Health care cost trend rates assumed for next year	4.00%	4.00%

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EMPLOYEE BENEFITS (Obligation and Funded Status) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Pension Benefits
Reconciliation of benefit obligation
Benefit obligation at beginning of year	$ 171,876	$ 160,390
Service cost	6,857	6,490	$ 6,675
Interest cost	7,060	6,654	5,999
Actuarial loss	26,963	2,215
Adjustment for plan amendment	0	0
Benefit payments	(4,407)	(3,873)
Benefit obligation at end of year	208,349	171,876	160,390
Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year	128,430	106,600
Actual return on plan assets	22,225	9,320
Employer contributions	11,396	16,383
Benefit payments	(4,407)	(3,873)
Fair value of plan assets at end of year	157,644	128,430	106,600
Funded status at end of year	(50,705)	(43,446)
Accumulated pension benefit obligation	184,436	152,620
Post-retirement Benefits
Reconciliation of benefit obligation
Benefit obligation at beginning of year	46,785	72,175
Service cost	2,021	3,728	5,220
Interest cost	1,927	3,015	2,856
Actuarial loss	6,326	1,468
Adjustment for plan amendment	0	(32,289)
Benefit payments	(1,331)	(1,312)
Benefit obligation at end of year	55,728	46,785	72,175
Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year	0	0
Actual return on plan assets	0	0
Employer contributions	1,331	1,311
Benefit payments	(1,331)	(1,311)
Fair value of plan assets at end of year	0	0	$ 0
Funded status at end of year	$ (55,728)	$ (46,785)

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EMPLOYEE BENEFITS (AOCI) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Unrecognized prior service cost	$ 0	$ 0
Unrecognized actuarial (gain) loss	60,571	49,745
Total amounts recognized in AOCI	60,571	49,745
Anticipated amortization of net actuarial losses in next fiscal year	4,287
Post-retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Unrecognized prior service cost	(26,880)	(32,289)
Unrecognized actuarial (gain) loss	25,235	20,756
Total amounts recognized in AOCI	(1,645)	$ (11,533)
Anticipated amortization of net actuarial losses in next fiscal year	$ 2,355

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EMPLOYEE BENEFITS (Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Pension Benefits
Net periodic benefit cost
Service cost	$ 6,857	$ 6,490	$ 6,675
Interest cost	7,060	6,654	5,999
Expected return on plan assets	(9,650)	(7,952)	(7,800)
Amortization of prior service cost	0	0	0
Amortization of net loss	3,562	3,968	4,546
Net periodic benefit cost	7,829	9,160	9,420
Post-retirement Benefits
Net periodic benefit cost
Service cost	2,021	3,728	5,220
Interest cost	1,927	3,015	2,856
Expected return on plan assets	0	0	0
Amortization of prior service cost	(5,409)	0	0
Amortization of net loss	1,846	1,518	2,920
Net periodic benefit cost	$ 385	$ 8,261	$ 10,996

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EMPLOYEE BENEFITS (Expected Benefit Payments) (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
2018	$ 5,620
2019	6,140
2020	6,780
2021	7,520
2022	8,240
2023 - 2027	52,950
Post-retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
2018	1,350
2019	1,540
2020	1,700
2021	1,880
2022	2,050
2023 - 2027	$ 13,310

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EMPLOYEE BENEFITS (Profit-Sharing Plan and ESOP) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Profit-Sharing Plan
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Employer contribution to the profit-sharing plan	$ 4,987	$ 2,904	$ 7,706

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STOCK-BASED COMPENSATION (Stock Award Plans) (Details) - shares	1 Months Ended	12 Months Ended	108 Months Ended	156 Months Ended
	May 31, 2014	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of option awards exercised (in shares)		173,635
Employee Stock Award Plan-2008
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of option awards vest and exercisable in installments		20.00%
Award expiration term		10 years
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Beginning balance (in shares)		1,248,651	1,900,000
Additional shares authorized (in shares)	1,500,000	0	1,500,000
Number of awards granted (in shares)		(259,405)	(2,871,971)
Number of awards forfeited or expired (in shares)		7,582	468,799
Ending balance (in shares)		996,828	996,828	996,828
Employee Stock Award Plan-2008 | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of option awards exercised (in shares)		136,827	1,085,895
Employee Stock Award Plan-2008 | Unrestricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of awards granted (in shares)		(1,145)	(8,470)
Employee Stock Award Plan-2008 | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of restricted stock awards vested (in shares)		1,198	38,168
Director Plan - 2005
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Beginning balance (in shares)		74,771		300,000
Number of awards granted (in shares)		(12,958)		(262,190)
Number of awards forfeited or expired (in shares)		0		24,003
Ending balance (in shares)		61,813	61,813	61,813
Director Plan - 2005 | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of option awards exercised (in shares)		36,808		89,281
Director Plan - 2005 | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of restricted stock awards vested (in shares)		22,716		54,272
Minimum | Employee Stock Award Plan-2008 | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of restricted stock awards		3 years
Maximum | Employee Stock Award Plan-2008 | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of restricted stock awards		5 years

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STOCK-BASED COMPENSATION (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Allocated share-based compensation expense	$ 4,808	$ 3,696	$ 2,510
2018	4,028
2019	2,776
2020	1,116
2021	390
2022	40
Total	$ 8,350

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STOCK-BASED COMPENSATION (Analysis of Stock Options Award Activity) (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2015 USD ($)
Shares
Outstanding at beginning of period (in shares) | shares	1,120,677
Granted (in shares) | shares	159,709
Exercised (in shares) | shares	(173,635)
Forfeited or expired (in shares) | shares	(5,700)
Outstanding at end of period (in shares) | shares	1,101,051	1,120,677
Exercisable at end of period (in shares) | shares	495,089
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 29.08
Granted (in dollars per share) | $ / shares	41.75
Exercised (in dollars per share) | $ / shares	27.52
Forfeited or expired (in dollars per share) | $ / shares	28.66
Outstanding at end of period (in dollars per share) | $ / shares	31.16	$ 29.08
Exercisable at end of period (in dollars per share) | $ / shares	$ 26.77
Outstanding at end of period, weighted-average remaining life (in years)	6 years 6 months 7 days
Exercisable at end of period, weighted-average remaining life (in years)	3 years 2 months 19 days
Outstanding at end of period, aggregate intrinsic value | $	$ 15,875
Exercisable at end of period, aggregate intrinsic value | $	9,311
Intrinsic value of options exercised | $	$ 3,159	$ 4,339	$ 1,546

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STOCK-BASED COMPENSATION (Analysis of Restricted Stock Award Activity) (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2015 USD ($)
Weighted-Average Grant Date Fair Value
Allocated share-based compensation expense | $	$ 4,808	$ 3,696	$ 2,510
Restricted Stock Awards
Shares
Non-vested at beginning of period (in shares) | shares	182,086
Granted (in shares) | shares	111,509
Vested (in shares) | shares	(23,914)
Forfeited (in shares) | shares	(1,882)
Non-vested at end of period (in shares) | shares	267,799	182,086
Weighted-Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share) | $ / shares	$ 34.08
Granted (in dollars per share) | $ / shares	41.94
Vested (in dollars per share) | $ / shares	36.77
Forfeited (in dollars per share) | $ / shares	40.27
Non-vested at end of period (in dollars per share) | $ / shares	$ 37.07	$ 34.08
Allocated share-based compensation expense | $	$ 2,987	$ 1,766	924
Total compensation expense that has yet to be recognized | $	5,107
Intrinsic value of the unvested restricted stock awards outstanding | $	$ 2,279	$ 2,747	$ 1,520

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STOCK-BASED COMPENSATION (Assumptions) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Risk-free interest rate	2.23%	1.53%	1.94%
Expected volatility	27.58%	25.44%	21.92%
Expected option life (in years)	7 years	7 years	7 years
Expected dividends (in dollars per share)	$ 1.00	$ 0.88	$ 0.8
Weighted-average grant-date fair value of options granted during the year (in dollars per share)	$ 9.93	$ 8.42	$ 4.98

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STOCK-BASED COMPENSATION (Stock Options Outstanding and Exercisable) (Details)	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Exercise Price $15.01 to $21.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range (in dollars per share)	$ 15.01
Range of Exercise Prices, Upper Range (in dollars per share)	$ 21.00
Number Outstanding (in shares) | shares	100,805
Weighted-Average Remaining Contractual Life (in years)	3 years 2 months 23 days
Weighted-Average Exercise Price (in dollars per share)	$ 20.24
Number Exercisable (in shares) | shares	100,805
Weighted-Average Exercise Price (in dollars per share)	$ 20.24
Exercise Price $21.01 to $28.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range (in dollars per share)	21.01
Range of Exercise Prices, Upper Range (in dollars per share)	$ 28.00
Number Outstanding (in shares) | shares	159,478
Weighted-Average Remaining Contractual Life (in years)	4 years 6 months 7 days
Weighted-Average Exercise Price (in dollars per share)	$ 23.38
Number Exercisable (in shares) | shares	127,077
Weighted-Average Exercise Price (in dollars per share)	$ 23.23
Exercise Price $28.01 to $35.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range (in dollars per share)	28.01
Range of Exercise Prices, Upper Range (in dollars per share)	$ 35.00
Number Outstanding (in shares) | shares	508,630
Weighted-Average Remaining Contractual Life (in years)	6 years 5 months 1 day
Weighted-Average Exercise Price (in dollars per share)	$ 29.49
Number Exercisable (in shares) | shares	235,833
Weighted-Average Exercise Price (in dollars per share)	$ 29.74
Exercise Price $35.01 to $41.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range (in dollars per share)	35.01
Range of Exercise Prices, Upper Range (in dollars per share)	$ 43
Number Outstanding (in shares) | shares	332,138
Weighted-Average Remaining Contractual Life (in years)	8 years 7 months 17 days
Weighted-Average Exercise Price (in dollars per share)	$ 40.77
Number Exercisable (in shares) | shares	31,374
Weighted-Average Exercise Price (in dollars per share)	$ 39.84
Exercise Price $15.01 to $41.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range (in dollars per share)	15.01
Range of Exercise Prices, Upper Range (in dollars per share)	$ 43
Number Outstanding (in shares) | shares	1,101,051
Weighted-Average Remaining Contractual Life (in years)	6 years 6 months 7 days
Weighted-Average Exercise Price (in dollars per share)	$ 31.16
Number Exercisable (in shares) | shares	495,089
Weighted-Average Exercise Price (in dollars per share)	$ 26.77

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SEGMENT INFORMATION (Narrative) (Details)	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2017 segment location	Sep. 17, 2017 segment	Dec. 31, 2017 location
Segment Reporting Information [Line Items]
Number of reportable business segments | segment	1	2
Continuing Operations - Property and Casualty Insurance
Segment Reporting Information [Line Items]
Number of domestic business locations | location	6		6
Continuing Operations - Property and Casualty Insurance | Commercial Lines | Product Concentration Risk | Sales Revenue, Segment
Segment Reporting Information [Line Items]
Percentage of insurance in force			92.90%
Continuing Operations - Property and Casualty Insurance | Personal Lines | Product Concentration Risk | Sales Revenue, Segment
Segment Reporting Information [Line Items]
Percentage of insurance in force			7.10%

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SEGMENT INFORMATION (Net Premiums) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting, Revenue Reconciling Item [Line Items]
Total net premiums earned from continuing operations	$ 997,492	$ 936,131	$ 851,695
Continuing Operations - Property and Casualty Insurance
Segment Reporting, Revenue Reconciling Item [Line Items]
Reinsurance assumed	15,059	17,037	18,396
Other	2,988	2,835	3,179
Total net premiums earned from continuing operations	997,492	936,131	851,695
Continuing Operations - Property and Casualty Insurance | Other liability
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	306,480	289,982	261,303
Continuing Operations - Property and Casualty Insurance | Fire and allied lines
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	270,716	265,221	246,450
Continuing Operations - Property and Casualty Insurance | Automobile
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	277,511	239,216	210,090
Continuing Operations - Property and Casualty Insurance | Workers' compensation
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	104,166	103,605	95,672
Continuing Operations - Property and Casualty Insurance | Fidelity and surety
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	24,981	22,507	21,362
Continuing Operations - Property and Casualty Insurance | Reinsurance assumed
Segment Reporting, Revenue Reconciling Item [Line Items]
Reinsurance assumed	10,650	12,765	13,639
Discontinued Operations | Discontinued Operations - Life Insurance
Segment Reporting, Revenue Reconciling Item [Line Items]
Other	48	58	388
Total net premiums earned from continuing operations	61,368	87,270	79,984
Discontinued Operations | Discontinued Operations - Life Insurance | Ordinary life (excluding universal life)
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	35,388	63,668	53,114
Discontinued Operations | Discontinued Operations - Life Insurance | Universal life policy fees
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	13,145	11,577	12,834
Discontinued Operations | Discontinued Operations - Life Insurance | Immediate annuities with life contingencies
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	11,691	10,533	12,223
Discontinued Operations | Discontinued Operations - Life Insurance | Accident and health
Segment Reporting, Revenue Reconciling Item [Line Items]
Net premiums earned	$ 1,096	$ 1,434	$ 1,425

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QUARTERLY SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Continuing Operations [Abstract]
Total revenues	$ 273,355	$ 269,617	$ 258,487	$ 251,278	$ 264,537	$ 255,625	$ 244,866	$ 231,334	$ 1,052,737	$ 996,362	$ 899,271
Income (loss) before income taxes	29,369	(32,394)	(4,331)	23,006	13,925	14,035	1,372	28,165	15,650	57,497	115,370
Net income (loss)	$ 45,259	$ (19,082)	$ 109	$ 18,584	$ 12,035	$ 11,628	$ 3,435	$ 22,020	$ 44,870	$ 49,118	$ 85,320
Basic earnings per share (in dollars per share)	$ 1.81	$ (0.77)	$ 0.00	$ 0.73	$ 0.46	$ 0.46	$ 0.13	$ 0.87	$ 1.79	$ 1.94	$ 3.41
Diluted earnings per share (in dollars per share)	$ 1.78	$ (0.77)	$ 0.00	$ 0.72	$ 0.46	$ 0.45	$ 0.13	$ 0.86	$ 1.75	$ 1.90	$ 3.38
Discontinued Operations [Abstract]
Total revenues	$ 28,386	$ 27,054	$ 28,492	$ 31,781	$ 37,458	$ 33,869	$ 34,907	$ 34,351	$ 115,713	$ 140,585
Income before income taxes	2,294	1,880	4,386	2,083	(71)	1,140	(508)	609	10,643	1,170
Net income	$ 734	$ 1,218	$ 2,849	$ 1,352	$ (40)	$ 740	$ (321)	$ 407	$ 6,153	$ 786	$ 3,806
Basic earnings per share (in dollars per share)	$ 0.03	$ 0.05	$ 0.11	$ 0.05	$ 0.00	$ 0.03	$ (0.01)	$ 0.02	$ 0.24	$ 0.03	$ 0.15
Diluted earnings per share (in dollars per share)	$ 0.03	$ 0.05	$ 0.11	$ 0.05	$ 0.00	$ 0.03	$ (0.01)	$ 0.02	$ 0.24	$ 0.03	$ 0.15

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EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Basic and Diluted Earnings per Share [Line Items]
Net income from continuing operations	$ 45,259	$ (19,082)	$ 109	$ 18,584	$ 12,035	$ 11,628	$ 3,435	$ 22,020	$ 44,870	$ 49,118	$ 85,320
Weighted-average common shares outstanding (in shares)									25,103,720	25,335,706	25,047,405
Weighted-average common shares, diluted (in shares)									25,640,604	25,804,678	25,235,996
Earnings per common share from continuing operations, basic (in dollars per share)	$ 1.81	$ (0.77)	$ 0.00	$ 0.73	$ 0.46	$ 0.46	$ 0.13	$ 0.87	$ 1.79	$ 1.94	$ 3.41
Earnings per common share from continuing operations, diluted (in dollars per share)	1.78	(0.77)	0.00	0.72	0.46	0.45	0.13	0.86	1.75	1.90	3.38
Earnings per common share from discontinued operations, basic (in dollars per share)	0.03	0.05	0.11	0.05	0.00	0.03	(0.01)	0.02	0.24	0.03	0.15
Earnings per common share from discontinued operations, diluted (in dollars per share)	$ 0.03	$ 0.05	$ 0.11	$ 0.05	$ 0.00	$ 0.03	$ (0.01)	$ 0.02	0.24	0.03	0.15
Earnings per common share, basic (in dollars per share)									2.03	1.97	3.56
Earnings per common share, diluted (in dollars per share)									$ 1.99	$ 1.93	$ 3.53
Awards excluded from diluted calculation (in shares)									0	0	343,390
Restricted Stock Awards
Basic and Diluted Earnings per Share [Line Items]
Add dilutive effect of restricted stock awards (in shares)									250,530	155,059	122,840
Stock Options
Basic and Diluted Earnings per Share [Line Items]
Add dilutive effect of restricted stock awards (in shares)									286,354	313,913	65,751

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LEASE COMMITMENTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Leases [Abstract]
Rental expense, operating leases	$ 7,197	$ 6,908	$ 6,256
Lease term	5 years
Monthly lease payments	$ 154
Future minimum rental payments:
2018	6,435
2019	6,027
2020	5,529
2021	3,173
2022	643
Thereafter	718
Total	$ 22,525

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CREDIT FACILITY (Details)		12 Months Ended
	Feb. 02, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 100,000,000
Debt covenant, maximum debt to total capitalization ratio	0.35
Interest expense incurred		0	$ 0	$ 0
Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 50,000,000	50,000,000
Debt instrument, term	4 years
Outstanding balance		$ 0	$ 0
Letter of Credit Subfacility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 20,000,000
Swingline Subfacility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 5,000,000

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INTANGIBLE ASSETS (Intangible Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	$ 15,091	$ 15,091
Net intangible assets	8,880	9,649
State insurance licenses
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	3,020	3,020
Agency relationships
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	10,338	10,338
Accumulated amortization	(5,566)	(4,929)
Finite-lived intangible assets, net	4,772	5,409
Software
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	3,260	3,260
Accumulated amortization	(3,260)	(3,260)
Finite-lived intangible assets, net	0	0
Trade names
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	1,978	1,978
Accumulated amortization	(890)	(758)
Finite-lived intangible assets, net	1,088	1,220
Favorable contract
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	286	286
Accumulated amortization	(286)	(286)
Finite-lived intangible assets, net	$ 0	$ 0

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INTANGIBLE ASSETS (Estimated Useful Lives) (Details)	12 Months Ended
	Dec. 31, 2017
Agency relationships
Finite-Lived Intangible Assets [Line Items]
Useful Life	15 years
Software
Finite-Lived Intangible Assets [Line Items]
Useful Life	2 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Useful Life	15 years
Favorable contract
Finite-Lived Intangible Assets [Line Items]
Useful Life	2 years

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INTANGIBLE ASSETS (Future Amortization Expense) (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2018	$ 719
2019	709
2020	709
2021	709
2022	$ 709

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ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward]
Change in accumulated other comprehensive income before reclassifications	$ 28,589	$ 27,990	$ (12,657)
Reclassification adjustments from accumulated other comprehensive income	(638)	628	1,921
Accumulated effect of change in enacted tax rate	31,308
Net unrealized appreciation on investments
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	133,892	128,369	149,623
Change in accumulated other comprehensive income before reclassifications	48,467	8,461	(18,321)
Reclassification adjustments from accumulated other comprehensive income	(4,152)	(2,938)	(2,933)
Accumulated effect of change in enacted tax rate	36,658
Ending balance	214,865	133,892	128,369
Liability for underfunded employee benefit costs
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(24,837)	(47,932)	(58,450)
Change in accumulated other comprehensive income before reclassifications	(19,878)	19,529	5,664
Reclassification adjustments from accumulated other comprehensive income	3,514	3,566	4,854
Accumulated effect of change in enacted tax rate	(5,350)
Ending balance	(46,551)	(24,837)	(47,932)
Accumulated other comprehensive income, net of tax
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	109,055	80,437	91,173
Accumulated effect of change in enacted tax rate	31,308	0	0
Ending balance	$ 168,314	$ 109,055	$ 80,437

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DISCONTINUED OPERATIONS Narrative (Details) - United Life Insurance Company - Discontinued Operations, Disposed of by Sale $ in Thousands	Sep. 18, 2017 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds	$ 280
Transition services agreement duration (up to)	24 months

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DISCONTINUED OPERATIONS Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fixed maturities
Total assets held for sale	$ 1,586,134	$ 1,605,618
Liabilities
Total liabilities held for sale	1,347,135	1,390,223
United Life Insurance Company | Discontinued Operations, Disposed of by Sale
Fixed maturities
Held-to-maturity, at amortized cost (fair value $34 in 2017 and $49 in 2016)	34	48
Fixed maturities, held-to-maturity securities, fair value	34	49
Available-for-sale, at fair value (amortized cost $1,412,291 in 2017 and $1,429,270 in 2016)	1,430,025	1,444,840
Fixed maturities, available-for-sale securities, amortized cost	1,412,291	1,429,270
Equity Securities available-for-sale, at fair value (cost $5,099 in 2017 and $8,510 in 2016)	23,653	24,046
Equity securities, available-for-sale securities, amortized cost	5,099	8,510
Mortgage loans	3,435	3,706
Policy loans	5,815	5,366
Other long-term investments	16,437	15,870
Total Investments	1,479,399	1,493,876
Cash and cash equivalents	15,851	21,659
Deferred policy acquisition costs	71,151	70,750
Other assets	19,733	19,333
Total assets held for sale	1,586,134	1,605,618
Liabilities
Future policy benefits and losses	1,320,401	1,350,503
Deferred income taxes	18,716	27,739
Accrued expenses and other liabilities	8,018	11,981
Total liabilities held for sale	$ 1,347,135	$ 1,390,223

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DISCONTINUED OPERATIONS Statements of Income (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net realized investment gains (losses)
Total revenues	$ 28,386	$ 27,054	$ 28,492	$ 31,781	$ 37,458	$ 33,869	$ 34,907	$ 34,351	$ 115,713	$ 140,585
Benefits, Losses and Expenses
Income from discontinued operations before income taxes	2,294	1,880	4,386	2,083	(71)	1,140	(508)	609	10,643	1,170
Federal income tax expense									4,490	384	$ 2,275
Net income from discontinued operations	$ 734	$ 1,218	$ 2,849	$ 1,352	$ (40)	$ 740	$ (321)	$ 407	$ 6,153	$ 786	$ 3,806
Earnings per common share from discontinued operations:
Basic (in dollars per share)	$ 0.03	$ 0.05	$ 0.11	$ 0.05	$ 0.00	$ 0.03	$ (0.01)	$ 0.02	$ 0.24	$ 0.03	$ 0.15
Diluted (in dollars per share)	$ 0.03	$ 0.05	$ 0.11	$ 0.05	$ 0.00	$ 0.03	$ (0.01)	$ 0.02	$ 0.24	$ 0.03	$ 0.15
United Life Insurance Company | Discontinued Operations, Disposed of by Sale
Revenues
Net premiums earned									$ 61,368	$ 87,270	$ 79,195
Investment income, net of investment expenses									49,720	51,538	54,222
Net realized investment gains (losses)
Other-than-temporary impairment charges									0	0	(1,300)
Net realized investment gains									4,008	1,156	3,022
Total net realized investment gains									4,008	1,156	1,722
Other income									617	621	508
Total revenues									115,713	140,585	135,647
Benefits, Losses and Expenses
Losses and loss settlement expenses									40,451	31,365	29,001
Increase in liability for future policy benefits									27,632	59,969	50,945
Amortization of deferred policy acquisition costs									5,181	8,121	6,634
Other underwriting expenses									13,281	19,881	19,306
Interest on policyholders’ accounts									18,525	20,079	23,680
Total benefits, losses and expenses									105,070	139,415	129,566
Income from discontinued operations before income taxes									10,643	1,170	6,081
Federal income tax expense									4,490	384	2,275
Net income from discontinued operations									$ 6,153	$ 786	$ 3,806
Earnings per common share from discontinued operations:
Basic (in dollars per share)									$ 0.24	$ 0.03	$ 0.15
Diluted (in dollars per share)									$ 0.24	$ 0.03	$ 0.15

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Schedule I. Summary of Investments - Other than Investments in Related Parties (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	$ 1,630,224
Fair Value	1,888,933
Amounts at Which Shown in Balance Sheet	1,888,933
Fixed Maturities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	1,531,342
Fair Value	1,552,062
Amounts at Which Shown in Balance Sheet	1,552,062
United States Government and government agencies and authorities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	94,941
Fair Value	95,353
Amounts at Which Shown in Balance Sheet	95,353
States, municipalities and political subdivisions
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	1,019,420
Fair Value	1,034,827
Amounts at Which Shown in Balance Sheet	1,034,827
Foreign governments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	10,865
Fair Value	11,130
Amounts at Which Shown in Balance Sheet	11,130
Public utilities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	43,064
Fair Value	43,692
Amounts at Which Shown in Balance Sheet	43,692
All other bonds
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	360,657
Fair Value	364,501
Amounts at Which Shown in Balance Sheet	364,501
Redeemable preferred stock
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	2,395
Fair Value	2,559
Amounts at Which Shown in Balance Sheet	2,559
Equity Securities [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	63,275
Fair Value	287,344
Amounts at Which Shown in Balance Sheet	287,344
Public utilities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	4,661
Fair Value	16,060
Amounts at Which Shown in Balance Sheet	16,060
Banks, trusts and insurance companies
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	11,266
Fair Value	113,487
Amounts at Which Shown in Balance Sheet	113,487
Industrial, miscellaneous and all other
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	44,077
Fair Value	153,959
Amounts at Which Shown in Balance Sheet	153,959
Nonredeemable preferred stocks
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	3,271
Fair Value	3,838
Amounts at Which Shown in Balance Sheet	3,838
Other long-term investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	35,432
Fair Value	49,352
Amounts at Which Shown in Balance Sheet	49,352
Short-term investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	175
Fair Value	175
Amounts at Which Shown in Balance Sheet	175
Discontinued Operations
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	1,440,751
Fair Value	1,479,558
Amounts at Which Shown in Balance Sheet	1,479,399
Discontinued Operations | Fixed Maturities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	1,412,325
Fair Value	1,430,059
Amounts at Which Shown in Balance Sheet	1,430,059
Discontinued Operations | United States Government and government agencies and authorities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	43,706
Fair Value	43,706
Amounts at Which Shown in Balance Sheet	43,706
Discontinued Operations | States, municipalities and political subdivisions
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	37,963
Fair Value	38,363
Amounts at Which Shown in Balance Sheet	38,363
Discontinued Operations | Foreign governments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	40,496
Fair Value	41,623
Amounts at Which Shown in Balance Sheet	41,623
Discontinued Operations | Public utilities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	162,964
Fair Value	165,452
Amounts at Which Shown in Balance Sheet	165,452
Discontinued Operations | All other bonds
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	1,127,196
Fair Value	1,140,915
Amounts at Which Shown in Balance Sheet	1,140,915
Discontinued Operations | Equity Securities [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	5,099
Fair Value	23,653
Amounts at Which Shown in Balance Sheet	23,653
Discontinued Operations | Public utilities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	2,544
Fair Value	7,253
Amounts at Which Shown in Balance Sheet	7,253
Discontinued Operations | Banks, trusts and insurance companies
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	467
Fair Value	3,158
Amounts at Which Shown in Balance Sheet	3,158
Discontinued Operations | Industrial, miscellaneous and all other
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	2,088
Fair Value	13,242
Amounts at Which Shown in Balance Sheet	13,242
Discontinued Operations | Mortgage loans on real estate
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	3,435
Fair Value	3,594
Amounts at Which Shown in Balance Sheet	3,435
Discontinued Operations | Policy loans
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	5,815
Fair Value	5,815
Amounts at Which Shown in Balance Sheet	5,815
Discontinued Operations | Other long-term investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost or Amortized Cost	14,077
Fair Value	16,437
Amounts at Which Shown in Balance Sheet	$ 16,437

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Schedule II. Condensed Financial Statements of Parent Company (Condensed Balance Sheet) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $150 in 2017 and $150 in 2016)	$ 150	$ 150
Cash and cash equivalents	95,562	89,194	$ 89,496	$ 66,718
Federal income tax receivable	6,031	14,285
Accrued investment income	13,841	13,617
Total assets	4,183,431	4,054,758
Liabilities and stockholders' equity
Liabilities	3,210,058	3,112,874
Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 24,916,806 and 25,429,769 issued and outstanding in 2017 and 2016, respectively	25	25
Additional paid-in capital	196,334	216,482
Retained earnings	608,700	616,322
Accumulated other comprehensive income, net of tax	168,314	109,055
Total stockholders' equity	973,373	941,884	878,897	817,415
Total liabilities and stockholders' equity	4,183,431	4,054,758
United Fire Group, Inc.
Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $150 in 2017 and $150 in 2016)	150	150
Investment in subsidiary	967,590	925,887
Cash and cash equivalents	4,537	14,325	$ 6,565	$ 2,263
Federal income tax receivable	1,095	1,521
Accrued investment income	1	1
Total assets	973,373	941,884
Liabilities and stockholders' equity
Liabilities	0	0
Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 24,916,806 and 25,429,769 issued and outstanding in 2017 and 2016, respectively	25	25
Additional paid-in capital	196,334	216,482
Retained earnings	608,700	616,322
Accumulated other comprehensive income, net of tax	168,314	109,055
Total stockholders' equity	973,373	941,884
Total liabilities and stockholders' equity	$ 973,373	$ 941,884

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Schedule II. Condensed Financial Statements of Parent Company (Condensed Balance Sheet) (Phantom) (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Condensed Balance Sheet Statements, Captions [Line Items]
Held-to-maturity securities	$ 150	$ 150
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	24,916,806	25,429,769
Common stock, shares outstanding (in shares)	24,916,806	25,429,769
United Fire Group, Inc.
Condensed Balance Sheet Statements, Captions [Line Items]
Held-to-maturity securities	$ 150	$ 150
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	24,916,806	25,429,769
Common stock, shares outstanding (in shares)	24,916,806	25,429,769

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Schedule II. Condensed Financial Statements of Parent Company (Condensed Statement of Income and Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues
Investment income									$ 51,190	$ 55,284	$ 46,559
Total revenues	$ 273,355	$ 269,617	$ 258,487	$ 251,278	$ 264,537	$ 255,625	$ 244,866	$ 231,334	1,052,737	996,362	899,271
Expenses
Net income									51,023	49,904	89,126
Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary									72,251	13,017	(28,185)
Change in liability for underfunded employee benefit plans									(26,122)	30,045	8,714
Other comprehensive income (loss), before tax and reclassification adjustments									46,129	43,062	(19,471)
Income tax effect									(17,540)	(15,072)	6,814
Other comprehensive income (loss), after tax, before reclassification adjustments									28,589	27,990	(12,657)
Reclassification adjustment for net realized gains included in income									(6,390)	(4,520)	(4,513)
Reclassification adjustment for employee benefit costs included in expense									5,408	5,486	7,468
Total reclassification adjustments, before tax									(982)	966	2,955
Income tax effect									344	(338)	(1,034)
Total reclassification adjustments, after tax									(638)	628	1,921
Comprehensive income									78,974	78,522	78,390
United Fire Group, Inc.
Revenues
Investment income									133	66	25
Total revenues									133	66	25
Expenses
Other operating expenses									103	73	116
Total expenses									103	73	116
Income (loss) before income taxes and equity in net income of subsidiary									30	(7)	(91)
Federal income tax benefit									(1,060)	(3)	(42)
Net income (loss) before equity in net income of subsidiary									1,090	(4)	(49)
Equity in net income of subsidiary									49,933	49,908	89,175
Net income									51,023	49,904	89,126
Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary									72,251	13,017	(28,185)
Change in liability for underfunded employee benefit plans									(26,122)	30,045	8,714
Other comprehensive income (loss), before tax and reclassification adjustments									46,129	43,062	(19,471)
Income tax effect									(17,540)	(15,072)	6,814
Other comprehensive income (loss), after tax, before reclassification adjustments									28,589	27,990	(12,657)
Reclassification adjustment for net realized gains included in income									(6,390)	(4,520)	(4,513)
Reclassification adjustment for employee benefit costs included in expense									5,408	5,486	7,468
Total reclassification adjustments, before tax									(982)	966	2,955
Income tax effect									344	(338)	(1,034)
Total reclassification adjustments, after tax									(638)	628	1,921
Comprehensive income									$ 78,974	$ 78,522	$ 78,390

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Schedule II. Condensed Financial Statements of Parent Company (Condensed Statement of Cash Flows) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities
Net income	$ 51,023	$ 49,904	$ 89,126
Adjustments to reconcile net income to net cash provided by operating activities
Other, net	3,378	(9,943)	(2,914)
Total adjustments	125,224	165,266	104,679
Net cash provided by operating activities	170,094	214,384	189,999
Cash flows from investing activities
Proceeds from maturity of held-to-maturity investments	150	493	105
Purchase of held-to-maturity investments	(150)	(42)	(450)
Net cash used in investing activities	(61,985)	(112,403)	(36,286)
Cash flows from financing activities
Repurchase of common stock	(29,784)	(3,746)	(2,423)
Issuance of common stock	4,828	9,922	5,496
Tax impact from issuance of common stock	0	(816)	(833)
Net cash used in financing activities	(107,549)	(97,577)	(137,837)
Net Change in Cash and Cash Equivalents	560	4,404	15,876
Cash and Cash Equivalents at Beginning of Year - Continuing Operations	89,194	89,496	66,718
Cash and Cash Equivalents at End of Year - Continuing Operations	95,562	89,194	89,496
United Fire Group, Inc.
Cash flows from operating activities
Net income	51,023	49,904	89,126
Adjustments to reconcile net income to net cash provided by operating activities
Equity in net income of subsidiary	(49,933)	(49,908)	(89,175)
Dividends received from subsidiary	40,000	24,000	22,500
Other, net	1,415	2,995	1,269
Total adjustments	(8,518)	(22,913)	(65,406)
Net cash provided by operating activities	42,505	26,991	23,720
Cash flows from investing activities
Proceeds from maturity of held-to-maturity investments	150	0	0
Purchase of held-to-maturity investments	(150)	0	0
Net cash used in investing activities	0	0	0
Cash flows from financing activities
Payment of cash dividends	(27,337)	(24,591)	(21,658)
Repurchase of common stock	(29,784)	(3,746)	(2,423)
Issuance of common stock	4,828	9,922	5,496
Tax impact from issuance of common stock	0	(816)	(833)
Net cash used in financing activities	(52,293)	(19,231)	(19,418)
Net Change in Cash and Cash Equivalents	(9,788)	7,760	4,302
Cash and Cash Equivalents at Beginning of Year - Continuing Operations	14,325	6,565	2,263
Cash and Cash Equivalents at End of Year - Continuing Operations	$ 4,537	$ 14,325	$ 6,565

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Schedule III. Supplementary Insurance Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	$ 159,253	$ 164,112	$ 168,264
Future Policy Benefits, Losses, Claims and Loss Expenses	2,544,584	2,474,399	2,376,253
Unearned Premiums	465,458	443,873	415,057
Earned Premium Revenue	1,058,860	1,023,401	930,890
Investment Income, Net	100,910	106,822	100,781
Benefits, Claims, Losses and Settlement Expenses	793,796	743,767	600,033
Amortization of Deferred Policy Acquisition Costs	212,927	211,013	186,817
Other Underwriting Expenses	116,909	103,421	102,937
Interest on Policyholders' Accounts	18,525	20,079	23,680
Premiums Written	1,019,113	964,970	887,874
Continuing Operations - Property and Casualty Insurance
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	88,102	93,362	90,547
Future Policy Benefits, Losses, Claims and Loss Expenses	1,224,183	1,123,896	1,003,895
Unearned Premiums	465,391	443,802	414,971
Earned Premium Revenue	997,492	936,131	851,695
Investment Income, Net	51,190	55,284	46,559
Benefits, Claims, Losses and Settlement Expenses	725,713	652,433	520,087
Amortization of Deferred Policy Acquisition Costs	207,746	202,892	180,183
Other Underwriting Expenses	103,628	83,540	83,631
Interest on Policyholders' Accounts	0	0	0
Premiums Written	1,019,113	964,970	887,874
Discontinued Operations | Discontinued Operations - Life Insurance
Supplementary Insurance Information, by Segment [Line Items]
Deferred Policy Acquisition Costs	71,151	70,750	77,717
Future Policy Benefits, Losses, Claims and Loss Expenses	1,320,401	1,350,503	1,372,358
Unearned Premiums	67	71	86
Earned Premium Revenue	61,368	87,270	79,195
Investment Income, Net	49,720	51,538	54,222
Benefits, Claims, Losses and Settlement Expenses	68,083	91,334	79,946
Amortization of Deferred Policy Acquisition Costs	5,181	8,121	6,634
Other Underwriting Expenses	13,281	19,881	19,306
Interest on Policyholders' Accounts	18,525	20,079	23,680
Premiums Written	$ 0	$ 0	$ 0

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Schedule IV. Reinsurance (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Gross Amount	$ 5,309,508	$ 5,314,548	$ 5,491,932
Ceded to Other Companies	1,014,794	1,023,197	1,165,868
Assumed From Other Companies	0	0	0
Net Amount	4,294,714	4,291,351	4,326,064
Total [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Gross Amount	1,107,828	1,067,128	972,413
Ceded to Other Companies	64,027	60,764	59,919
Assumed From Other Companies	15,059	17,037	18,396
Net Amount	$ 1,058,860	$ 1,023,401	$ 930,890
Percentage of Amount Assumed to Net Earned	1.42%	1.66%	1.98%
Continuing Operations - Property and Casualty Insurance
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Gross Amount	$ 1,043,738	$ 977,090	$ 890,057
Ceded to Other Companies	61,305	57,996	56,758
Assumed From Other Companies	15,059	17,037	18,396
Net Amount	$ 997,492	$ 936,131	$ 851,695
Percentage of Amount Assumed to Net Earned	1.51%	1.82%	2.16%
Discontinued Operations | Discontinued Operations - Life, accident and health insurance
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Gross Amount	$ 64,090	$ 90,038	$ 82,356
Ceded to Other Companies	2,722	2,768	3,161
Assumed From Other Companies	0	0	0
Net Amount	$ 61,368	$ 87,270	$ 79,195
Percentage of Amount Assumed to Net Earned	0.00%	0.00%	0.00%

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Schedule V. Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for bad debts
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	$ 1,255	$ 867	$ 618
Charged to costs and expenses	0	388	249
Deductions	0	0	0
Balance at end of period	1,255	1,255	867
Deferred tax asset valuation allowance
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	718	1,265	1,813
Charged to costs and expenses	0	0	0
Deductions	389	547	548
Balance at end of period	$ 329	$ 718	$ 1,265

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Schedule VI. Supplemental Information Concerning Property and Casualty Insurance Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Net realized investment gains	$ 4,055	$ 4,947	$ 1,124
Claims and Claim Adjustment Expenses Incurred Related to: Current Year	779,966	683,662	560,482
Claims and Claim Adjustment Expenses Incurred Related to: Prior Years	(54,253)	(31,229)	(40,395)
Consolidated Property and Casualty Insurance Entity
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Deferred Policy Acquisition Costs	88,102	93,362	90,547
Reserves for Unpaid Claims and Claim Adjustment Expenses	1,224,183	1,123,896	1,003,895
Unearned Premiums	465,391	443,802	414,971
Earned Premiums	997,492	936,131	851,695
Net realized investment gains	4,055	4,947	1,124
Net Investment Income	51,190	55,284	46,559
Claims and Claim Adjustment Expenses Incurred Related to: Current Year	(779,966)	683,662	560,482
Claims and Claim Adjustment Expenses Incurred Related to: Prior Years	(54,253)	(31,229)	(40,395)
Amortization of Deferred Policy Acquisition Costs	207,746	202,892	180,183
Paid Claims and Claim Adjustment Expenses	625,503	537,573	476,525
Premiums Written	$ 1,019,113	$ 964,970	$ 887,874